GQG Partners Inc (ASX: GQG) shares are quickly building a reputation as a high-yielding ASX dividend share. Indeed, it could be paying a very large dividend yield by 2024.
For investors who haven't heard of this business before, it's a recently-listed funds management business, though it was growing for a number of years when it was unlisted.
It offers four main share investment strategies – global equity, international equity, emerging markets, and US equity.
With the GQG share price down around 25% over the past year, I think this is a great time to be looking at the company.
Dividend prediction
With a market capitalisation of more than $4 billion, it's a large funds management business and is benefiting from increasing scale.
The ASX dividend share currently has a dividend payout ratio policy of 90% of distributable earnings. That means most of the profit that it generates is turning into passive income for shareholders.
According to the estimate on Commsec, the business could pay an annual dividend per share of 13.2 cents per share in 2024. This translates into a forward dividend yield of 9.3%.
While it's harder to predict things further ahead, Commsec currently has a projection of 16 cents for 2025. That would be a future dividend yield of 11.3%.
Remember, GQG pays out its dividend quarterly, so investors can receive their income in pleasing regular amounts.
Why can earnings keep growing?
At 30 June 2022, the fund manager was able to report that each of its main investment strategies had outperformed over the prior 12 months, at five years, and since inception. Achieving outperformance is certainly a good way to attract more funds under management (FUM).
Indeed, the ASX dividend share continues to see pleasing fund inflows, despite the volatility in the share market. For the three months to 30 September 2022, the business saw net inflows of US$0.8 billion. It's seeing these fund inflows across multiple geographies and major channels.
With the vast majority of the company's revenue and earnings coming from management fees, not performance fees, GQG's profit (and dividend) can be more resilient and consistent.
The US-based business is expanding geographically, such as its presence in both Canada and Australia. Last year, it opened offices in Brisbane and Melbourne.
GQG notes that its management is (still) the largest shareholder in GQG, meaning its team is "highly aligned with shareholders, and acutely focused on and committed to GQG's future".
Foolish takeaway
Dividends are not guaranteed so we can't say for sure how much dividend income is going to be paid in the coming years. There's a chance that it could end up paying even more than the estimates.
I think the fund manager's investment strategy can continue to produce good returns for investors. This can be good for FUM and, therefore, good for earnings and its dividend.
