If you are searching for passive income in this low interest rate environment, then look no further than the ASX dividend stock in this article.
That's because it has one of the most generous dividend yields around and has been tipped to rise materially from current levels.
Which ASX dividend stock?
The stock that could be a great pick for passive income is GQG Partners Inc (ASX: GQG).
GQG Partners is a boutique investment management company that manages global and emerging market equity portfolios for institutions, advisors, and individuals worldwide.
It is a majority employee-owned company that is headquartered in Fort Lauderdale, Florida, with offices around the world.
The company notes that it "strives for excellence at all levels within the organization through a commitment to independent thinking, continual growth, cultural integrity, and a deep knowledge of the markets."
The strategy the investment management company uses is called Forward Looking Quality. It notes that this concept ignores the traditional investment constraints associated with growth and value and instead focuses on investing in companies that it believes are going to be successful over the next five years and beyond.
At the last count, it reported that it had US$163.7 billion of assets under management (AUM).
Undervalued
The team at Macquarie Group Ltd (ASX: MQG) thinks the ASX dividend stock is undervalued at current levels.
A recent note reveals that the broker has an outperform rating and $2.50 price target on its shares.
Based on its current share price of $1.85, this implies potential upside of 35% for investors over the next 12 months.
To put that into context, a $10,000 investment would turn into approximately $13,500 by this time next year if Macquarie is on the money with its recommendation.
But the returns won't stop there!
What about passive income?
GQG Partners is being tipped to provide investors with some very big dividend yields in the near term.
According to Macquarie's note, it expects the ASX dividend stock to reward its shareholders with the equivalent of 22.6 Australian cents per share in FY 2025 and then 22.9 Australian cents per share in FY 2026.
This means that if you were to buy its shares at current prices, you would be looking at dividend yields of 12.2% and 12.4%, respectively.
This equates to passive income of $1,220 and $1,240, respectively, from a $10,000 investment in GQG Partners' shares.
