The S&P/ASX 200 Index (ASX: XJO) is up 5% in 2024, with little help from this high-yielding ASX 200 stock to date.
The company in question manages a portfolio of mining royalty assets covering bulks, base metals, and battery metals. With these royalties paid on a percentage of revenue, shareholders also have a degree of inflation protection.
But with most commodity prices tumbling this year, so too have shares in the ASX 200 stock. Shares closed yesterday trading for $3.44 apiece, down 35% year to date.
Any guesses?
If you said Deterra Royalties Ltd (ASX: DRR), give yourself a virtual gold star.
Now a number of leading brokers are forecasting a big turnaround in the Deterra share price.
Goldman Sachs, for example, has a $4.60 price target on Deterra shares.
Among the reasons for the broker's bullishness is its belief that the ASX 200 stock is undervalued. It trades on an attractive dividend yield, has a strong balance sheet, and offers several future growth options.
JPMorgan has an even more bullish outlook for Deterra. On Tuesday, The Australian noted that JPMorgan raised Deterra to an overweight rating with a $4.70 price target.
That represents a very appealing 36.6% potential upside from yesterday's closing price.
What's been happening with the ASX 200 stock?
Deterra reported its full-year results (FY 2024) on 20 August.
Highlights included a 4.0% year-on-year increase in revenue to $240.5 million.
As Motley Fool analyst James Mickleboro noted of the revenue bump on the day, "The key driver of this was an 11% increase in royalties to $239.3 million from the Mining Area C (MAC) operation operated by BHP Group Ltd (ASX: BHP)."
And with net profit after tax up 1.6% from FY 2023 to $154.9 million, so too were the full-year dividends.
The ASX 200 stock paid out, or shortly will have paid out, a total of 29.3 cents per share in fully franked dividends over the 12 months, up 1.5% from the prior year.
Eligible investors can expect the final dividend of 14.4 cents per share to land in their bank accounts on 24 September. However, it's a bit too late to grab that passive income payout, as Deterra shares traded ex-dividend on 27 August.
At yesterday's closing price, Deterra trades on a fully franked trailing dividend yield of 8.5%.
Commenting on ASX 200 stock's FY 2024 results, Deterra managing director Julian Andrews said, "Deterra's full-year results for FY24 once again reflect the quality of our cornerstone MAC asset and the high margin nature of our business model."
