The ASX healthcare share Monash IVF Group Ltd (ASX: MVF) could be an underrated ASX dividend share, in my eyes.
If we look at the chart below, we can see that Monash IVF briefly touched a 52-week low of $1.11 yesterday.
In the last six months, the Monash IVF share price has dropped by more than 20%. While that's painful, it has increased the prospective dividend yield for FY25 by more than 20%.
Monash IVF is a fertility business providing IVF and various fertility treatments, along with diagnostic and additional services.
Judging by what has recently happened with the ASX healthcare share's dividend in FY24 and the projection for the dividend in FY25, I think the outlook for passive income is very promising.
Potential dividend income
In the 2024 financial year, the company decided to pay a full-year dividend of 5 cents per share, up from 4.4 cents per share in FY23. That represents a year-over-year increase of 13.6%.
Excitingly, the business is projected to grow its dividend again for shareholders in the 2025 financial year, which is the current year.
According to the projection on Commsec, the FY25 payout per share could be 6 cents per share, which would represent a fully franked dividend yield of 5.4% and a grossed-up (including franking credits) dividend yield of 7.7%.
If it paid that annual payout, it would mean the ASX healthcare share has grown or maintained its dividend each year since FY21.
Does Monash IVF have a positive future?
The company is expecting revenue and underlying net profit growth in FY25 compared to FY24, despite flat new patient registrations (excluding acquisitions) in the second half of FY24 compared to the second half of FY23.
There may be a few drivers of that potential result for the ASX healthcare share.
Monash IVF pointed to a full-year contribution from the Fertility North acquisition, which was completed in March 2024.
Monash IVF says there will be an earnings contribution in FY25 from new fertility specialists that joined the company in the last two years. The company is also focused on attracting additional specialists in FY25.
Monash IVF expects an increased contribution from recently opened day surgeries as theatre utilisation ramps up, investments in genetics and increased donor activity, ongoing growth in the women's imaging business, ongoing growth in the international business, including Singapore and Kuala Lumpur, and a focus on improving profit margins.
If some or all of these factors combine, the ASX healthcare share's underlying earnings could benefit, which could help the Monash IVF dividend and share price.
