Invest in this 6% yielding ASX 300 dividend stock for passive income

Let's check the credentials of this dividend share.

| More on:
A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Goldman is tipping this ASX 300 share to pay a dividend yield of more than 6% in FY23 
  • This ASX 300 share has soared 48% in a year 
  • Brokers at Goldman and Bell Potter are tipping the company's good run to continue

Passive income can be a great way to earn extra money without having to leave the comfort of your home.

One ASX 300 dividend stock that may provide investors with a decent yield is Accent Group Ltd (ASX: AX1).

Accent shares fell 4.33% in Thursday's trade and closed at $2.43. For perspective, the S&P/ASX 300 (ASX: XKO) slid 0.26% on the last day of trading before Easter.

So is this ASX 300 dividend stock a good buy for passive income?

Dividend yield

Accent paid an interim dividend of 12 cents per share in the first half of FY23. This represents a dividend yield of 4.9% based on the company's last closing share price of $2.43.

Looking ahead, Goldman Sachs is tipping Accent to hand out fully franked dividends of 15 cents per share in FY23. This represents a dividend yield of 6.2%.

Meanwhile, Bell Potter is tipping Accent to pay out dividends of 15.5 cents per share in FY23 and 12.2 cents per share in FY24. This represents dividend yields of 6.4% and 5% respectively.

Accent is known for its lifestyle and footwear brands. The company has more than 805 retail stores covering 26 retail names. The company estimates it will have 825 stores by the end of FY23.

The Accent share price has soared 45% in the year to date and 48% in the last year.

And analysts are tipping this top run to continue. In a research note on 29 March, Goldman said "we believe the market is underestimating the full earnings potential" of Accent's business. Goldman has placed a $3.10 price target on Accent's share price.

Commenting on Accent, Goldman said:

We see AX1 as well protected from a potential slowdown in discretionary spend given its exposure to a younger consumer and performance footwear.

The business is yet to achieve its full earnings potential, in our view, notwithstanding a strong recovery post lockdowns.

Our FY24/FY25 forecast is +9.8%/+12.8% of consensus.

Bell Potter is also positive on Accent. Analysts were impressed with the company's first-half performance and are confident this can continue due to its exposure to younger consumers. The younger demographic is not as hard hit by inflation and rising interest rates.

Accent delivered record sales and profit in the first half of FY23. NPAT soared 295.2% on the prior corresponding half, while EBITDA lifted 70.9%.

Motley Fool contributor Monica O'Shea 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 Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A beautiful woman holds up one finger with one hand and has her hand on her waist with the other as she smiles widely as though she is very pleased about something.
Share Gainers

Why Boss Energy, Emeco, Mineral Resources, and Plenti shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »

Three small children reach up to hold a toy rocket high above their heads in a green field with a blue sky above them.
Share Gainers

3 ASX 300 shares going gangbusters on Wednesday

Investors are bidding up these three ASX 300 shares today. But why?

Read more »

Man raising both his arms in the air with a piggy bank on his lap, symbolising a record high.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a huge Tuesday for ASX shares, with the index resetting its record high.

Read more »