The ASX stock market has suffered significantly in the last few weeks as investors push the sell button following negative news regarding the building trade war between the US and the rest of the world. While this has hurt share prices, it does open up the possibility of buying ASX dividend shares at a better price for stronger passive income.
Trump announced a 10% tariff on virtually all countries and nearly all products, with some countries such as China, the EU, India, and Vietnam receiving even larger tariffs.
Why is this helpful when looking at income stocks? When a share price falls 10%, it boosts the dividend yield by 10%. For example, if a business had a dividend yield of 5% and then the share price fell 10%, the dividend yield becomes 5.5%. If it fell 20%, the yield would become 6%. With that in mind, I think the two ASX dividend share options below look very appealing after the sell-off.
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Pinnacle Investment Management Group Ltd (ASX: PNI)
This business invests in fund managers with the aim of helping them grow. It helps take care of a lot of the behind-the-scenes work so the fund managers can focus on investing, not administration.
Some of the services it provides include distribution and client services, middle office and fund administration, compliance, finance, legal, technology and other infrastructure. It can also provide working capital and seed funds under management (FUM).
The Pinnacle share price has dropped 35% since 5 February 2025, making it seem a lot cheaper to me. While its FUM may fall amid this market sell-off, I think there could be a bounce-back if/when stocks recover, particularly if Pinnacle's fund managers continue to receive positive net inflows from clients. In the first half of FY25, it saw net inflows of $6.7 billion.
The last two dividends from the ASX dividend share amounts to a grossed-up dividend yield of around 4.5%, including the attached franking credits.
GQG Partners Inc (ASX: GQG)
GQG is in a somewhat similar situation. It's a (US-based) fund manager that is hurting from the global stock market decline because of the hit to FUM that is happening.
The GQG share price is down by around 20% since 17 February 2025, making it much cheaper despite the fact that it received positive net flows of more than US$1 billion in both January and February 2025.
This ASX dividend share is expanding its presence in different countries, such as the UK and Australia, while also growing into other areas such as private capital.
Given that GQG charges lower management fees than many of its peers, I think the ASX dividend share is well-placed to continue attracting FUM.
The last four quarterly dividends declared by the business come to a dividend yield of approximately 7.25%.
