While interest rates are improving, there isnât a savings account of term deposit that could match the potential returns on offer from the ASX stock named below.
In fact, if youâre patient, you could be earning over $1,000 in passive income from a $10,000 investment next year.
$1,000 income from this ASX stock
If you were to invest $10,000 into Mineral Resources Ltd (ASX: MIN) shares right now, you would receive 112 shares based on the current share price of $89.01.
According to a note out of Bell Potter, its analysts are expecting the mining and mining services company to pay fully franked dividends per share of $3.73 in FY 2023. This means that those 112 shares would provide investors with income of approximately $420.
But it gets much better in FY 2024. Thanks to the companyâs booming lithium operations, the broker is expecting a huge jump in the Mineral Resources dividend to a fully franked $9.41 per share.
If this forecast is accurate, those 112 shares would yield a massive $1,053 in dividends.
And if you continue to hold onto this ASX stock in FY 2025, Bell Potter reckons youâll be benefiting from another dividend increase to $9.60 per share. This would generate $1,075 in passive income from those 112 shares.
What about capital gains?
Another positive is that Bell Potter believes fair value for the Mineral Resources share price is notably higher than current levels.
It has a buy rating and $110.00 price target on its shares.
If this ASX stock were to climb to that level, your 112 shares would have a market value of $12,320. Thatâs a 23% return on your original investment even before the dividends start rolling in.
The post Investing $10k in this ASX stock could generate passive income of over $1k per year appeared first on The Motley Fool Australia.
Should you invest $1,000 in Mineral Resources Limited right now?
Before you consider Mineral Resources Limited, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Mineral Resources Limited wasn’t one of them.
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See The 5 Stocks
*Returns as of March 1 2023
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More reading
- Forget high interest savings accounts and buy these ASX 200 dividend shares with huge yields: analysts
- Last chance to snag the next dividend from these 4 ASX 200 mining shares
- 10 ASX 200 stocks trading ex-dividend tomorrow
- 2 ASX shares offering both growth and nice dividends: expert
- Mineral Resources share price slides as Norwest takeover bid heats up
Motley Fool contributor James Mickleboro 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 no position in any of the stocks mentioned. 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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