The Australian share market is a great place to generate a second income.
There are countless ASX stocks out there that share a portion of their profits each year with their shareholders.
And tens of thousands of investors have been using one ASX stock's monopoly position to grow their wealth for decades.
Which ASX monopoly stock?
The stock we are going to talk about today is Transurban Group (ASX: TCL).
Transurban is one of Australia's largest toll road operators, with a portfolio of motorways stretching across Sydney, Melbourne, Brisbane, and international exposure in North America.
This includes CityLink and the West Gate Tunnel Project in Melbourne, Cross City Tunnel and the Eastern Distributor in Sydney, and AirportlinkM7 and Clem7 in Brisbane.
Its business model is highly attractive for income-focused investors because toll roads generate predictable, inflation-linked cash flows that can support steady distributions.
The company's long-term concessions mean it can collect tolls for decades, making it a defensive infrastructure play. In addition, population growth and urbanisation are providing natural tailwinds, as demand for road infrastructure remains strong.
Investing $10,000 into its shares
On Friday, Transurban's shares ended the week at $13.78. This means that on Monday we could buy 726 shares with a $10,000 investment (and an extra $4.28 for good measure).
Firstly, the team at UBS appears to believe this would be a good idea. A recent note reveals that its analysts have put a buy rating and $14.85 price target on its shares.
If its shares were to rise to this level, it would give those 726 units a market value of $10,781.10. That's almost $800 more than we started with.
What about the second income?
UBS believes that Transurban is well positioned to pay dividends of 65 cents per share in FY 2025 and then 69 cents per share in FY 2026.
If the broker is on the money with its forecasts, this would mean that our 726 shares in the toll road operator would pull in a second income of $471.90 in FY 2025 and then $500.94 in FY 2026.
Combined with the potential share price gains, investors are looking at a potential total return in the region of $1,250 over the next 12 months from a $10,000 investment.
That's not bad from a boring infrastructure and income play, if you ask me.
