Down 39% in 12 months with a 13% yield, are GQG shares too cheap to ignore?

It has been a rough ride for the GQG Partners Inc (ASX: GQG) share price over the last year, it's down around 40% since July 2025, as the chart below shows. The drop of the valuation has led to a big increase in the dividend yield.

GQG is a leading US-based fund manager offering four main strategies. Its key funds are focused on international shares (excluding the US), emerging market shares, US shares and global shares.

Headwinds to turn into tailwinds?

Short-term investment performance has been difficult as the fund manager positioned its portfolios defensively to protect against excessive, lofty valuations. Despite that, all four of its strategies have outperformed their respective benchmarks since their inception in 2014.

I think the business has a lot of potential to outperform from this current low point in the GQG share price.

The business could see better performance in the coming months if share markets rise, providing a tailwind for its funds under management (FUM) to rise. Or, if the market falls, its defensive positioning could enable outperformance of the benchmark.

FUM outflows have already slowed significantly, and returning to outperformance could help GQG regain FUM inflows.

Big dividend yield

The business is currently paying out approximately 90% of its distributable profit to shareholders, which is a very generous level of passive income.

With the large drop in the GQG share price, it's now trading on a very low price/earnings (P/E) ratio, giving investors an opportunity to buy this business for incredible value.

It pays its dividend quarterly, meaning investors receive their payouts at a pleasing frequency. The latest dividend was AU $0.04878 per share, which translates into an annualised dividend yield of 13.4%.

That also suggests that the business is currently valued at less than 7x its current annualised distributable profit.

If FUM were to continue declining over a long period, that would not be ideal. But GQG has a long track record of outperforming its benchmarks, and I believe it can get back to that level of performance.

What do analysts think of the GQG share price?

According to CMC Invest, there have been three ratings on the business within the last three months, with two buy ratings and one hold rating. The average price target is $1.76, implying a possible rise of around 20% over the next year.

Overall, it seems like the business is significantly undervalued, and it can provide investors with a lot of passive income.