Buy this ASX stock, down 60% in a year, for its attractive dividend
Accent Group offers an attractive fully franked dividend yield backed by its scalable store network, high returns on capital and clear growth initiatives which also provide a solid foundation for longer-term value creation.
Accent Group Limited (ASX: AX1)
showed resilience in FY25 as the company delivered total owned sales of $1.46 billion and maintained a strong gross margin of 54.9% despite softer consumer conditions.
Net profit after tax for the year was $57.7 million and EBIT was stable at $110.2 million which reflects ongoing cost control initiatives across logistics and lease renewals.
Accent operates a large and scalable network of 892 stores across Australia and New Zealand alongside 31 online sites which provides a strong omni-channel reach.
A key recent development was the launch of Sports Direct in partnership with Frasers Group with the first physical store and online platform already live and additional stores planned through FY26.
In a trading update for the first 20 weeks of FY26, total group owned sales increased by 3.7% year-to-date while like for like sales were lower by 0.4%.
Management guided to full year EBIT of $85 million to $95 million for FY26 as it balances margin pressures with continued investment in growth initiatives.
Accent maintains a strong balance sheet and has paid fully franked dividends on a semi-annual basis for many years which continues to attract income focused investors.
The stock currently offers an attractive annual dividend yield of 7.53% which reflects consistent cash generation alongside recent share price weakness.
Accent Group has a current market capitalisation of $559.1 million and trades at a P/E ratio of 9.21 which suggests that the valuation reflects conservative earnings expectations but the company has set a good base for massive growth.
The outlook is supported by new store rollouts growth in distributed and vertical brands and the scaling of Sports Direct which could support future earnings growth.
(Source: Company Announcements)
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