Fairly or unfairly, a decent S&P/ASX 200 Index (ASX: XJO) company sells for cheap because it's not particularly "sexy".
But shrewd investors will know if the share price is cheap, dividends are flowing, and the business has potential catalysts, then it's worth considering.
There could be one ASX dividend stock mentioned recently that could fit this bill, which investors could be tempted to buy right now:
Image source: Getty Images
What could move the dial for this dividend stock?
Intellectual property services provider IPH Ltd (ASX: IPH) never seems to make any headlines.
Unfortunately, its share price has been languishing, now travelling at 31.5% lower than it was in October last year.
Shaw and Partners portfolio manager James Gerrish noted the company gave an update to investors at its annual general meeting last week.
"Trading update was slightly ahead of consensus but it hasn't excited investors at this stage," he said in the Market Matters newsletter.
"We believe the main driver for a PE re-rate will be stabilisation/improvement of Australia and New Zealand market share to restore investors' confidence in what the sustainable organic growth outlook actually is."
Management also flagged that a corporate manoeuvring could also move the share price.
"They also made a point at their AGM this week to say they remain in active discussions on further potential transactions, and continue to assess further M&A in Canada and other regions."
Indeed, on Tuesday morning, IPH did exactly this, making its third acquisition in Canada for $124 million.
Is it worth adding to the portfolio?
Considering all this and the dividend yield, Gerrish's analysts admit IPH shares are a tempting buy.
"On a 5% yield over the next 12 months and the current PE of 15.5x, there is not huge upside factored into the current price, making it relatively attractive below $7 over the medium term."
IPH shares are trading well below that threshold at the moment, making it a value buy in those terms.
According to CMC Markets, six out of the nine analysts that cover the stock reckon IPH is a buy right now.
