The ASX dividend stock GQG Partners Inc (ASX: GQG) has suffered a 23% decline in the last few months. As the chart below shows, it has been a disappointing run since November 2024. However, lower prices can make a business more appealing.
GQG describes itself as a global investment boutique primarily focused on managing active share portfolios and is headquartered in the US. Its clients include large pension funds, sovereign funds, wealth management outfits and other financial institutions around the world.
The business offers a number of strategies for investors including US shares, international shares, global shares, emerging market shares and dividend shares.
There are a few reasons why I think this is a great time to look at this ASX dividend stock amid its lower valuation.
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Strong operating performance
I think it's a good idea to focus on businesses that are growing over time. It's clear to me that an ASX dividend stock is better value if its underlying operations are still growing, whereas a deteriorating business is harder to value.
The company recently announced its result for the 12 months to 31 December 2024. Its average funds under management (FUM) rose 45.4% to US$148.2 billion, revenue rose 46.9% to US$760.4 million, net profit increased 52.8% to US$431.6 million and the dividend per share was hiked by 50.2% to US 13.67 cents.
During the year, the business received net flows of US$20.2 billion. Positive net flows have continued into 2025. In the monthly update for February 2025, the business said its year-to-date net inflows were US$2.8 billion.
Cyclical opportunity
The business is heavily exposed to the global share market because of the FUM it manages for investors. When global stocks fall, it hurts the company's FUM, which impacts its ability to generate revenue and profit.
During a global share market downturn, it's understandable that the GQG share price could be among the ones that are harder hit compared to other sectors.
But, a larger fall could mean a bigger recovery when things eventually rebound.
For example, when a share price falls 20%, just to get back to the same level, it would be a rise of 25%.
In summary, I think it's a buy-the-dip opportunity.
Management buying GQG shares
I think it's a great sign of value when management buy shares. The leader of GQG, Rajiv Jain, has been buying over $200,000 of GQG shares each trading day going back to early March, with the latest announcement released on 21 March 2025.
With Jain now owning just over 2 billion shares, that means he has over $4 billion invested in this ASX dividend stock.
He's financially aligned with ordinary shareholders. This provides strong motivation to get the company's profit and share price higher than it is today.
Pleasing investor metric
When I look at the growth the business is achieving, I think it's worthy of a higher price/earnings (P/E) ratio than it's trading at right now.
According to the forecasts on Commsec, the ASX dividend stock is trading at 9x FY25's estimated earnings with a possible dividend yield of 10%. Even if the P/E ratio doesn't improve, I think the dividend yield and FUM momentum can help deliver good returns.
