The ASX dividend stock GQG Partners Inc (ASX: GQG) has seen its share price sink approximately 50% since July 2024, as shown in the chart below. This low valuation makes me think it's a great time to invest.
GQG is a fund manager that provides clients with exposure to four key strategies: international shares (excluding US shares), emerging markets, global shares, and US shares.
Funds management businesses can be very volatile because their profits (and, subsequently, share prices) are closely linked to movements in the overall share market, which in turn influences funds under management (FUM).
Let's take a look at why I think this could be a compelling time to look at the ASX dividend stock.
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Excellent ASX dividend stock credentials
I'm not expecting the business to grow its dividend every year, particularly this year. But, pleasingly, it did increase its dividend each year between 2022 and 2025. Ongoing growth of FUM will be essential for noticeable dividend growth in the future.
Even so, its current quarterly dividend is so large that I think this makes it very attractive.
The ASX dividend stock's latest quarterly dividend, which will be paid later this month, is AU 4.878 cents per share. That quarterly dividend by itself is a 3.27% dividend yield, at the time of writing. Annualised, that dividend yield is 13% if it repeats that payout over the next year.
The business is paying around 90% of its distributable profit to shareholders each quarter. That means investors are being rewarded with most of the profit, but a little is still kept to strengthen the company for the future.
Any business with a double-digit yield could be very compelling for passive income.
Why this is a good time to invest in GQG shares
I think that funds management businesses are notoriously cyclical, so it could be an effective choice to be contrarian.
GQG has seen FUM outflows in recent times, but these appear to be reducing, and if its fund performance returns to prior strength, this could protect existing FUM and help attract new FUM.
The ASX dividend stock now seems to be trading at a very cheap valuation. At the time of writing, it appears to be trading at less than 7x its current annualised distributable profit.
Even if there are ongoing FUM outflows, longer-term investment performance could help grow FUM, profit, and the dividend. If FUM outflows stabilise, then it could look significantly undervalued, in my opinion.
But, GQG isn't the only ASX dividend stock that looks attractive to buy right now.
