While interest rates are improving, there isn't a savings account of term deposit that could match the potential returns on offer from the ASX stock named below.
In fact, if you're patient, you could be earning over $1,000 in passive income from a $10,000 investment next year.
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$1,000 income from this ASX stock
If you were to invest $10,000 into Mineral Resources Ltd (ASX: MIN) shares right now, you would receive 112 shares based on the current share price of $89.01.
According to a note out of Bell Potter, its analysts are expecting the mining and mining services company to pay fully franked dividends per share of $3.73 in FY 2023. This means that those 112 shares would provide investors with income of approximately $420.
But it gets much better in FY 2024. Thanks to the company's booming lithium operations, the broker is expecting a huge jump in the Mineral Resources dividend to a fully franked $9.41 per share.
If this forecast is accurate, those 112 shares would yield a massive $1,053 in dividends.
And if you continue to hold onto this ASX stock in FY 2025, Bell Potter reckons you'll be benefiting from another dividend increase to $9.60 per share. This would generate $1,075 in passive income from those 112 shares.
What about capital gains?
Another positive is that Bell Potter believes fair value for the Mineral Resources share price is notably higher than current levels.
It has a buy rating and $110.00 price target on its shares.
If this ASX stock were to climb to that level, your 112 shares would have a market value of $12,320. That's a 23% return on your original investment even before the dividends start rolling in.
