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

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

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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.

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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.

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