Buy this ASX All Ords stock for a 30% gain and 6% dividend yield

Bell Potter thinks investors should be snapping up this dirt cheap stock.

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If you are on the lookout for the dream combination of huge gains and a juicy dividend yield, then it could be worth taking a closer look at the ASX All Ords stock in this article.

That's because the team at Bell Potter believes that this stock could rise more than 30% over the next 12 months.

In addition, the broker is forecasting very attractive 6%+ dividend yields through to 2026.

Which ASX All Ords stock?

The ASX All Ords stock in question is Regal Partners Ltd (ASX: RPL).

It is a specialist alternative investment manager with approximately $12.1 billion in funds under management.

Regal Partners was formed in 2022 following the merger of Regal Funds Management and VGI Partners. It manages a broad range of investment strategies covering long/short equities, private markets, real and natural assets, and credit and royalties on behalf of institutions, family offices, charitable groups, and private investors.

According to the note, Bell Potter has been pleased with the company's recent performance and feels it could be outperforming expectations in respect to performance fees. It said:

The first four months have shown strong returns for the majority of the funds in the Regal stable. We consider which funds may be generating a performance fee, both by performance and size. A recent presentation from Regal (23 May) notes that 72% of FUM is at, or within 5% of HWM, compared to 54% at December. The implication is that H1 will show strong performance fees.

We consider six of Regal's funds and show year to date performance, fund or strategy size and attempt to estimate the size of performance fee that RPL could be generating. We estimate that from these six funds alone RPL could generate performance fees of around $55m (compared to our forecasts of $38m) with particularly strong contributions coming from the PM Capital Global companies, the Regal Australian Small Companies, Regal Tactical Opportunities and RF1 (- which including reinvestment of income is now back above its HWM). Across the entire stable of funds, we could expect the figure to be higher.

Big returns

The note reveals that Bell Potter has reaffirmed its buy rating on the ASX All Ords stock with an improved price target of $4.02.

Based on its current share price of $3.07, this implies potential upside of 31% for investors over the next 12 months.

In addition, the broker is forecasting fully franked dividends per share of 19.7 cents in FY 2024, 18.9 cents in FY 2025, and 21.7 cents in FY 2026. This equates to above-average dividend yields of 6.4%, 6.15%, and 7.1%, respectively.

Overall, the broker feels the market is undervaluing this ASX All Ords stock. It concludes:

As a result of these updates, our NPAT and adjusted EPS forecasts increase by 21.9% for FY24, 3.2% for FY25 and 2.5% for FY26. We adjust our price target to $4.02 (from $3.86 previously). We continue to favour RPL, given its strong organic & inorganic growth potential, and entrepreneurial culture. Following the acquisition of PM Capital and Taurus (50%) last year, the firm has shown an acceleration of inflows, strong investment performance and success in marketing new funds. We feel this strong performance is not reflected in the share price and see considerable upside.

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 no position in any of the stocks mentioned. 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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