Buy this ASX All Ords stock for a 15% gain and 9% dividend yield

Goldman Sachs is tipping big returns from this stock.

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It's always nice to be able to find an ASX All Ords stock that offers both market-beating gains and above-average dividend yields.

The only problem is that they are few and far between on the Australian share market.

But Goldman Sachs thinks it has identified an ASX All Ords stock that could do just this. That is fund manager GQG Partners Inc (ASX: GQG).

What is the broker saying about this ASX All Ords stock?

Goldman notes that GQG Partners has announced plans to acquire minority interests in Avante Capital Partners, Proterra Investment Partners, and Cordillera Investment Partners from Pacific Current Group Ltd (ASX: PAC).

This will create GQG Private Capital Solutions (PCS), which the company believes can become a strategic partner of choice for middle market private capital investment managers and offer compelling investment opportunities for clients.

Goldman is positive on the plan, it commented:

We think this acquisition is consistent with GQG's strategy and is a capital light approach to gain exposure to private markets (credit and equity) through debt financing. As stated, GQG's PCS division will provide financing and strategic solutions.

And while the businesses being acquired have been performing mixed, the broker sees reason to be positive. It adds:

Based on company released funds data, these businesses being acquired have shown mixed FUM performance. We do note however that these businesses have a pipeline of new product launches + access to GQG's global distribution capability and clients. We make no earnings changes as the acquisition is yet to complete.

Big gains and yields

As mentioned above, Goldman hasn't made any changes to its estimates yet. For now, it is forecasting earnings per share of 12 US cents (18.3 Australian cents) in FY 2024 and 14 US cents (21.3 Australian cents) in FY 2025. This means its shares are changing hands at an estimated 11.3x FY 2024 earnings and under 10x estimated FY 2025 earnings. This is well below average.

As for income, the broker is forecasting unfranked dividends of 12 US cents (18.3 Australian cents) in FY 2024 and 13 US cents (19.8 Australian cents) in FY 2025

So, with this ASX All Ords stock currently trading at $2.08, this will mean dividend yields of 8.8% and 9.5%, respectively, for investors.

Goldman also sees 15.4% upside for GQG's shares with its buy rating and $2.40 price target. This brings the total potential return on offer with its shares to approximately 24% over the next 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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