There have been some big returns generated in the mining sector over the next past 12 months.

But what about the next 12 months?

Well, one ASX mining stock that is being tipped by Bell Potter to rise materially is named below.

Let’s see why it could be destined to outperform the market by some distance between now and this time next year.

Which ASX mining stock?

The stock that is getting the team at Bell Potter excited is WA1 Resources Ltd (ASX: WA1).

It is a niobium explorer which owns the Luni Niobium Project in Western Australia.

Bell Potter has been pleased with recent developments and particularly the scaled-up beneficiation testwork results across four composites. It explains:

WA1 Resources has announced scaled-up beneficiation testwork results across four composites representing key Indicated Mineral Resource Estimate (MRE) zones at its 100%-owned Luni Niobium Project (Luni) in Western Australia. The testwork confirms a two-stage flotation regime can produce high-quality niobium concentrates with commercially relevant recoveries across the deposit, using raw site water. The testwork is a significant metallurgical data point and materially de-risks the beneficiation stage of the processing flowsheet.

Bell Potter was also pleased with the concentrate grades that were revealed. It adds:

The headline result is a weighted average concentrate grade of 44% Nb₂O₅ at 54% overall recovery across all four composites (open cycle, bulk float). Critically, Composite A, which incorporates material from the higher-grade portion of the resource area and that also represents the focus area for early years of mining, returned 46% Nb₂O₅ at 67% recovery, a significant uplift on prior results from this area. These results support an upward revision to our recovery assumptions and are directly feeding into the PFS, which remains on track for Q4 CY2026.

Big potential returns

According to the note, the broker has retained its speculative buy rating on the ASX mining stock with an improved price target of $27.20. Based on its current share price of $12.36, this implies potential upside of almost 120%. Bell Potter concludes:

We increase our valuation for WA1 to $27.20/sh (previously $24.40/sh) and maintain Our Speculative Buy recommendation. Our valuation for WA1 is based on a notional development scenario (NDS) for Luni discounted at 10% and risked at 30% to reflect the project’s current stage. We revise our recovery assumptions in our model upward to 54%, which sees our unrisked NPV10% increase from A$1,814m to ~A$2,021m — an ~11% uplift. Key catalysts include: PFS completion and Reserve declaration, further beneficiation optimisation of Composites B– D, downstream refining results, and strategic partner/government engagement.

The post Which ASX mining stock could rocket 100%+ after ‘breakthrough’? appeared first on The Motley Fool Australia.

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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.

I’d describe Rural Funds Group (ASX: RFF) as one of the most attractive high-yield ASX dividend stocks Aussies can buy. For me, it’s more appealing than the Age Pension.

Rural Funds Group is a real estate investment trust (REIT) that owns hundreds of millions of dollars of farmland across Australia. Its farms are spread across a number of farming areas, including cattle, almonds, macadamias, vineyards and cropping.

If I were thinking about an investment in retirement, owning farmland does sound appealing. Land always has value, it can produce something extremely essential to the population (food) and long-term inflation can be a useful tailwind to rental income.

Just to clarify, Rural Funds itself isn’t a farming operator, it just leases its land to high-quality tenants.

I think it offers a number of benefits for investors.

Strong rental income credentials

Rural Funds generates excellent rental income from tenants like Olam, JBS, Select Harvests Ltd (ASX: SHV), Stone Axe, Australian Agricultural Company Ltd (ASX: AAC) and Treasury Wine Estates Ltd (ASX: TWE). These businesses are among the leading operators nationally or even internationally.

Pleasingly, most of its rental income is steadily growing, with most contracts either being linked to CPI inflation, or having fixed annual increases, plus market reviews. This steady growth can help increase distributions organically in the coming years.

Additionally, I like that the rental income comes from a variety of areas, in different states and climate conditions.

Finally, the business has a weighted average lease expiry (WALE) of approximately 13 years, giving investors clear rental stability and visibility.

Why I think it’s more appealing than the Age Pension

To get a huge amount of passive income, you’d need to buy a lot of Rural Funds shares. I think it’s important to have diversification when it comes to a dividend portfolio.

But, I’d like to own Rural Funds shares because of the huge asset backing it would provide. That asset base can also climb in value over time, which can help boost our financial position.

Rural Funds has been paying an annual distribution per unit of 11.73 cents amid the headwinds of higher interest rates. That translates into a distribution yield of 5.7%. That makes it a high-yield ASX dividend stock, in my view.  

The Age Pension currently pays a maximum of around $31,200 for a single person, which is one of the most generous in the world.

To receive that much from Rural Funds, an investor would need to own 265,985 Rural Funds shares.

Again, I wouldn’t make Rural Funds my entire portfolio, though I’d be happy with exposure to this pleasing REIT as my ‘farm’ investment because of how passive it can be.

It looks like a great time to invest because, at the time of writing, it’s trading at a discount of around 34% to its adjusted net asset value (NAV). In other words, we’re able to get exposure to these farms for a very cheap price.

However, Rural Funds is not the only ASX share I’d buy for passive income today.

The post 265,985 shares of this high-yield ASX dividend stock pays an income equal to the Age Pension appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Rural Funds Group and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The recent Australian federal budget changes appear to make superannuation the best way for Australians to invest for passive income.

I think that’s true because superannuation has a lower tax rate compared to many individuals, trusts and companies. With the set-and-forget nature of superannuation, it makes it very easy to invest for the long-term with the retirement system.

Receiving passive income is a very simple and laid-back strategy when it comes to investing in shares. However, when considering the passive income return, we need to remember that the focus should be on the net income, meaning the after-tax return. Full-time working Aussies that invest for passive income in their own name could lose a third of those payments to tax each year, which isn’t ideal.

In my view, investing in superannuation is more appealing because of its lower tax rate in the accumulation phase compared to the typical individual’s tax rate for a full-time earner. It’s possible that the tax rate could be 0% in retirement.

It should be said that every household’s tax situation is different, so let’s look at the targeted income level of $11,000 per month, without talking about tax for the rest of this article.

How much is needed in superannuation for $11,000 of monthly passive income?

Receiving $11,000 in dividends each month equates to an annual goal of $132,000 per year. I bet lots of Australians would like to receive that amount of dividends each year without needing to do ongoing work to get the money flowing into the bank account.

I’d suggest Australian investors need to consider what types of investments they want to own and the yield that comes with it. In my view, ASX shares are the best pick for passive income, partially due to the likely franking credits that come attached to dividends from companies.

A portfolio with a dividend yield of 6% could be half the size of a portfolio with a dividend yield of 3% and generate the same level of dividend income.

For example, if a portfolio were approximately $2.2 million in size, it would generate approximately $132,000 of annual dividends with a 6% dividend yield. If a portfolio had a 3% dividend yield, it would need to be around $4.4 million in size to generate the same amount.

Of course, other dividend yields would require different-sized portfolios to achieve targeted levels of passive income. For example, a 5% dividend yield would require a portfolio size of $2.6 million to reach $132,000 annually.

The types of ASX dividend shares I’d want to buy

If an Australian superannuation investor wants to unlock mid-to-higher dividend yields, then they’re in luck. The ASX share market gives access to great companies with franking credits, real estate investment trusts (REITs) with compelling payouts and attractive valuations, as well as listed investment companies (LICs) with a pleasing track record of rising dividends.

Two of the businesses with a great track record of growing their payouts include investment house Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Kmart and Bunnings owner Wesfarmers Ltd (ASX: WES). I believe these two businesses will be able to compound their payouts.

I’m attracted to some mid-yielding names like Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), Australian Foundation Investment Co Ltd (ASX: AFI), Telstra Group Ltd (ASX: TLS) and WCM Quality Global Growth Fund (ASX: WCMQ).

Finally, for a higher dividend yield, I’d look at names like MFF Capital Investments Ltd (ASX: MFF), WCM Global Ltd (ASX: WQG), Future Generation Global Ltd (ASX: FGG) and Future Generation Australia Ltd (ASX: FGX).

The post How much is needed in superannuation to target an $11,000 monthly passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Mff Capital Investments, Rural Funds Group, Washington H. Soul Pattinson and Company Limited, Wcm Global Growth, and Wcm Quality Global Growth Fund. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia has positions in and has recommended Mff Capital Investments, Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.