If you are wanting some big returns to supercharge your portfolio, then look no further than the ASX financial stock in this article.
That's because the team at Macquarie Group Ltd (ASX: MQG) believes it could offer both major upside potential and big dividend yields.
Which ASX financial stock?
The stock that Macquarie is tipping as a buy to clients is GQG Partners Inc (ASX: GQG).
In case you're not familiar with the name, GQG is a global boutique asset management firm focused on active equity portfolios.
Macquarie notes that GQG Partners recently released its latest funds under management (FUM) update. While the update was softer than expected, it was still a positive period for the company.
Commenting on the ASX financial stock's performance, Macquarie said:
June net inflows were +$0.7bn, bringing 1H25 flows to +$8.0bn. Net flows for the half were $0.5bn below MRE forecast due to a softer June result. GQG portfolios continue to be defensively positioned, this resulted in all strategies underperforming their respective benchmarks in the quarter.
Major upside potential
The note reveals that Macquarie has retained its outperform rating on the company's shares with an improved price target of $2.90.
Based on its current share price of $2.23, this implies potential upside of 30% for investors over the next 12 months.
But the returns won't stop there. Macquarie believes the ASX financial stock is well-positioned to reward shareholders with some generous dividends this year and in the years to come.
It is forecasting dividends per share of 15.2 US cents in FY 2025, 16.7 US cents in FY 2026, and then 17.8 US cents in FY 2027. This represents dividend yields ranging from approximately 10% to 12% based on current exchange rates.
This means that in total, a 12-month return of approximately 40% is on the cards if Macquarie is on the money with its recommendation.
Commenting on its outperform rating, the broker said:
Our P/E-based TP is $2.90 (previously $2.80), with earnings changes supported by updated FX. The valuation is based on the mid-point of our 10-12x P/E range (unchanged). Outperform. At <9x NTM P/E with a >10% yield, valuation remains attractive. Catalysts: Monthly FUM updates; 1H25 result in Aug-25.
All in all, this could be an ASX financial stock to buy. Particularly given how Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks continue to look expensive at current levels.
