I'd buy 21,819 shares of this ASX stock to aim for $200 a month of passive income

When I think about which ASX stock could deliver the biggest sustainable dividend over the next 12 months, I'm drawn to the idea of GQG Partners Inc (ASX: GQG) shares.

Fund managers usually trade on a lower price/earnings (P/E) ratio than some other sectors, enabling them to have a relatively high dividend yield.

In addition that, fund managers don't require much more money to grow – it doesn't require a new distribution centre, 10% more staff or more locations to manage 10% more funds under management (FUM). They are very scalable, allowing them to provide a high dividend payout ratio.

Let's look at how the business could provide investors with a hefty level of dividends each month.

Receiving $200 of passive dividend income each month

Not many ASX shares pay a dividend every month – GQG is not one of them either. But, GQG does pay a dividend every quarter.

I think it may be better to think of the $200 per month goal as an annual target of $2,400 and then divide that by 12.

Let's take a look at what analysts are expecting the dividend to be from the business in the 2026 financial year. In recent times it has paid out 90% of its distributable earnings, so I wouldn't be surprised to see another large annual dividend next year.

According to the forecast from the broker UBS, the ASX stock could pay an annual dividend per share of US 13 cents in the 2026 financial year, translating into a forward dividend yield of 11%.

So, to receive $2,400 of annual dividend income, we're talking about needing 21,819 GQG shares at the time of writing.

Pleasingly, UBS is forecasting that the business could increase its annual dividend per share in the subsequent years. The broker suggests the business could pay an annual dividend per share of 14 cents in FY27, 15 cents per share in FY28 and 16 cents per share in FY29.

Is this a good time to invest in the ASX stock?

While it has risen more than 20% since the low in November, it's still down more than 20% in the past six months as it saw FUM outflows following weak fund performance as it positioned itself defensively against too much market excitement about AI. This led to underperformance this year, but the recent share price pain for AI stocks has helped GQG.

UBS said that GQG's investment performance "improved during Nov-25 with +360bps of alpha validating GQG's defensive posture amid increasing scepticism around the AI buildout." In other words, GQG outperformed the market quite substantially.

The broker believes GQG is good value with a P/E ratio of under 8 and early indications for December 2025 flows show "some improvement" with "trackable flows in positive territory".

While there could be plenty more volatility in the months and years ahead, this could be an appealing time to consider investing in the business.

The post I'd buy 21,819 shares of this ASX stock to aim for $200 a month of passive income appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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