This ASX dividend share is projected to pay a 7% yield by 2026

Here's why this globally-growing stock is exciting to me.

| More on:
A couple standing at a counter in a large retail store taking a bag being handed to them by a sales assistant.

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

In my view, the ASX dividend share Premier Investments Ltd (ASX: PMV) has a lot to offer investors who are looking for both passive income and growth.

After recently divesting some of its retail businesses, it retains the nightwear business Peter Alexander, child stationery retailer Smiggle, and a substantial portion of appliance maker Breville Group Ltd (ASX: BRG).

I think the remaining business has the potential to both grow profit and deliver pleasing dividends, as the forecasts show.

Let's look at what the company is projected to pay to see how exciting it could be as an ASX dividend share.

Passive income forecasts

According to the projection on Commsec, the company is predicted to pay an annual dividend per share of $1.12 in FY25. That translates into a fully franked dividend yield of 4.9% and a grossed-up dividend yield of 7%, including franking credits.

According to Commsec, the company is projected to grow its annual dividend per share by just over 5% to $1.18 per share in the 2026 financial year. This could mean the company pays a fully franked dividend yield of 5.2% and a grossed-up dividend yield of 7.4%, including franking credits.

Of course, these are just estimates and not guaranteed to happen. The company's board could decide on a lower (or higher) dividend payout ratio than expected.

Why I'd be interested in this ASX dividend share

For me, it all comes down to international growth.

Breville has a lot of international market growth potential, with recent expansion into regions such as China and the Middle East. Ongoing sales growth can help the company improve its operating leverage and profit margins.

In the last few months, Peter Alexander has decided to grow to the UK, which is a much larger market than Australia due to the bigger population. It has started with a few stores in London and can grow from there. The business can continue to expand in ANZ, with nine new stores in FY24.

Smiggle already has a significant global presence in more than 20 countries. I'm excited about how the business could grow in the Middle East, Indonesia, and other Asian countries.

According to the projection on Commsec, the Premier Investments share price is valued at just 16x FY26's estimated earnings, which is a compelling valuation for its potential future growth.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison 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 Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

A couple makes silly chip moustache faces and take a selfie on their phone.
Dividend Investing

Worried about falling interest rates? Here are 2 ASX 200 income shares to replace a term deposit today

Dividend shares are looking better and better in 2025.

Read more »

Man smiling at a laptop because of a rising share price.
Dividend Investing

Guess which high-yielding ASX All Ords dividend stock Macquarie expects to surge 34% in a year

Looking for market-beating passive income and share price gains? Check out this ASX All Ords stock!

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Dividend Investing

Buy BHP, Telstra, and this ASX dividend share

Brokers are tipping these shares as buys for income investors. But why?

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
Dividend Investing

Boosting passive income: With a 7.6% yield, is the YMAX ETF a good option?

Is this ETF's yield too good to be true?

Read more »

A man in a business shirt and tie takes a wide leap over a large steel trap with jagged teeth.
Bank Shares

5.75% yield: Are ANZ shares a dividend trap?

ANZ's dividend currently beats out its own term deposits.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Here are 3 buy-rated ASX dividend stocks to beat falling interest rates

Brokers are recommending these stocks to clients.

Read more »

Senior man wearing glasses and a leather jacket works on his laptop in a cafe.
Dividend Investing

Overinvested in BHP shares? Here are two alternative ASX dividend stocks

There are other businesses worth owning for passive income.

Read more »

Happy young couple saving money in piggy bank.
Dividend Investing

3 strong ASX dividend shares to buy instead of CBA

Analysts think these are better options than Australia's largest bank.

Read more »