Are you on the lookout for a combination of market-beating gains and a good dividend yield?
If you are, then it could be worth looking at the ASX 200 share in this article.
That's because analysts at Bell Potter expect this share to deliver both of these for investors.
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Which ASX 200 share?
The share in question is retail conglomerate Premier Investments Limited (ASX: PMV).
Earlier this week, the Peter Alexander and Smiggle owner released its full year results. Bell Potter highlights that it was a bit of a mixed release. It said:
Premier Investment's FY24 result was largely pre-reported, with the key update in the Smiggle brand revenue, a ~7% miss to BPe and Peter Alexander (PA) the key outperformer. The first 7 weeks of 1H25 has commenced softer than BPe with global sales -3.5% (on -2% pcp) and we estimate the Smiggle division (globally) tracking at – 15% on pcp, however the largest core brand, PA at +5% on pcp. The prioritisation of the divestment of non-core Apparel Brands (AB) to Myer (MYR) via an all-script sale was announced delaying the Smiggle demerger in Jan-25 with CEO search underway.
In light of this performance, the broker has reduced its earnings estimates.
However, it remains very positive on the ASX 200 share and believes the merger of its Apparel Brands business with Myer Holdings Ltd (ASX: MYR) could unlock some value for shareholders in the near term. It adds:
With AB/MYR to be targeted completion first, we expect some updates over the coming months by the Dec AGM and/or at MYR Strategy Day. We continue to see catalysts related to overall demerger plans as we view the upcoming AB/MYR merger as a good outcome considering that PMV retains the higher margin Smiggle/PA earnings base while the lower margin AB benefit from synergies in MYR. We estimate a revenue/earnings incrementality of up to $3/share within our PMV valuation or a ~$500m uplift in EV for AB/MYR and see a re-rate in the PMV multiple as warranted.
Time to buy
According to the note, the broker has retained its buy rating on the ASX 200 share with a trimmed price target of $34.00 (from $37.00).
Based on its current share price of $30.67, this implies potential upside of approximately 11% for investors over the next 12 months.
In addition, the broker is forecasting fully franked dividends of 111.7 cents in FY 2025 and then 123.2 cents in FY 2026. This equates to attractive dividend yields of 3.6% and 4%, respectively.
