If you are looking for a combination of strong gains and an above-average dividend yield, then you may want to consider the ASX All Ords stock in this article.
That's because Bell Potter believes it can deliver outsized total returns over the next 12 months.
Which ASX All Ords stock?
The stock in question is Regal Partners Ltd (ASX: RPL).
It is a growing boutique asset manager founded in 2004 by Andrew and Philip King in Sydney, Australia.
Regal Partners manages a number of alternative investment strategies and performs investment management and investment advisory services to a number of Australian Unit Trusts and Cayman Island Companies.
In recent years, the ASX All Ords stock has made a number of acquisitions and partnerships. This includes VGI Partners, PM Capital, Taurus, Merricks and Argyle.
What is the broker saying?
Bell Potter notes that the company recently released its preliminary funds under management (FUM) which revealed higher than expected FUM. It said:
The company issued an update covering Preliminary FUM and expected performance fees. Funds under management rose to approximately $18.0bn (net of distributions and reinvestments) at end 2024, is a 4.6% increase vs $17.1bn at end Q3 CY24. This was 2.1% ahead of our expected FUM of $17.7bn.
Over the quarter the company received $0.7bn of inflows and $0.2bn of commitments from an offshore investor. This is a strong figure and takes the H2 CY24 inflows to $1.1bn, or 6.9% (of $16.5bn of starting FUM) and 13.2% as an annualised rate.
In light of this, the broker has reaffirmed its buy rating and $4.85 price target on the ASX All Ords stock. Based on its current share price of $3.85, this implies potential upside of 26% for investors over the next 12 months.
In addition, the broker is forecasting a 5% dividend yield in FY 2025, rising to 6% in FY 2026.
Commenting on the company, the broker said:
We saw this as a positive announcement, with better-than-expected FUM, offset by performance fees below our forecast. The latter were widely reported in the press in early December, and this was reflected in the weak qshare price. Our Adjusted EPS forecast decreases by -7.3% for FY24, but increases by 3.9% for FY25, and 4.3% for FY26. Our valuation remains at $4.85/sh, reflecting that the value of higher future FUM offsets the lower FY24 performance fees. The business continues to grow strongly, and we believe investors should use the recent share price weakness as a Buying opportunity.
