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Buy this ASX All Ords share for a 30% gain and a 6% dividend yield

Man holding a calculator with banknotes of Australian dollars, symbolizing dividends.

Image source: Getty Images

If you’re looking for the dream combination of huge profits and a juicy dividend yield, it might be worth taking a closer look at ASX All Ords shares in this article.

That’s because the team at Bell Potter believes this stock could rise more than 30% over the next twelve months.

Moreover, the broker predicts a very attractive dividend yield of more than 6% until 2026.

Which ASX All Ords shares?

The ASX All Ords share in question is Regal Partners Ltd (ASX: RPL).

It is a specialist alternative investment manager with approximately $12.1 billion in assets under management.

Regal Partners was founded in 2022 following the merger of Regal Funds Management and VGI Partners. It manages a wide range of investment strategies including long/short equities, private markets, real and natural assets, and credit and royalties on behalf of institutions, family offices, charitable groups and private investors.

According to the note, Bell Potter is pleased with the company’s recent performance and believes it could exceed expectations on performance compensation. It said:

The first four months have seen strong returns for the majority of funds in the Regal stable. We look at which funds may generate a performance fee, both in terms of performance and size. A recent presentation from Regal (May 23) shows that 72% of FUM is at or within 5% of HWM, compared to 54% in December. The implication is that the first half will see strong performance fees.

We consider six of Regal’s funds, showing year-to-date performance, fund or strategy size, and attempt to estimate the size of the performance fee that RPL could generate. We estimate that RPL could generate performance fees of approximately $55 million from these six funds alone (compared to our forecasts of $38 million), with particularly strong contributions from the PM Capital Global businesses, the Regal Australian Small Companies, Regal Tactical Opportunities and RF1 ((which, including income reinvestment, is now back above HWM). Across the fund range, we would expect this figure to be higher.

Big returns

The note shows that Bell Potter has confirmed its buy rating on the ASX All Ords share with an improved price target of $4.02.

Based on the current share price of $3.07, this implies a potential upside of 31% for investors over the next twelve months.

Additionally, the broker predicts fully franked dividends per share of 19.7 cents in FY 2024, 18.9 cents in FY 2025 and 21.7 cents in FY 2026. This equates to above-average dividend yields of 6.4%, 6.15% and 7.1%. respectively.

Overall, the broker believes the market is undervaluing this ASX All Ords share. It concludes:

As a result of these updates, our NPAT and adjusted EPS forecasts increase by 21.9% for FY24, 3.2% for FY25 and 2.5% for FY26. We are adjusting our price target to $4.02 (from $3.86 previously). We continue to favor RPL given its strong organic and inorganic growth potential and entrepreneurial culture. Following the acquisition of PM Capital and Taurus (50%) last year, the company has demonstrated an acceleration of inflows, strong investment performance and success in bringing new funds to market. We believe this strong performance is not reflected in the share price and see significant upside potential.