Invest in this 6% yielding ASX 300 dividend stock for passive income

Passive income can be a great way to earn extra money without having to leave the comfort of your home.

One ASX 300 dividend stock that may provide investors with a decent yield is Accent Group Ltd (ASX: AX1).

Accent shares fell 4.33% in Thursday’s trade and closed at $2.43. For perspective, the S&P/ASX 300 (ASX: XKO) slid 0.26% on the last day of trading before Easter.

So is this ASX 300 dividend stock a good buy for passive income?

Dividend yield

Accent paid an interim dividend of 12 cents per share in the first half of FY23. This represents a dividend yield of 4.9% based on the company’s last closing share price of $2.43.

Looking ahead, Goldman Sachs is tipping Accent to hand out fully franked dividends of 15 cents per share in FY23. This represents a dividend yield of 6.2%.

Meanwhile, Bell Potter is tipping Accent to pay out dividends of 15.5 cents per share in FY23 and 12.2 cents per share in FY24. This represents dividend yields of 6.4% and 5% respectively.

Accent is known for its lifestyle and footwear brands. The company has more than 805 retail stores covering 26 retail names. The company estimates it will have 825 stores by the end of FY23.

The Accent share price has soared 45% in the year to date and 48% in the last year.

And analysts are tipping this top run to continue. In a research note on 29 March, Goldman said “we believe the market is underestimating the full earnings potential” of Accent’s business. Goldman has placed a $3.10 price target on Accent’s share price.

Commenting on Accent, Goldman said:

We see AX1 as well protected from a potential slowdown in discretionary spend given its exposure to a younger consumer and performance footwear.

The business is yet to achieve its full earnings potential, in our view, notwithstanding a strong recovery post lockdowns.

Our FY24/FY25 forecast is +9.8%/+12.8% of consensus.

Bell Potter is also positive on Accent. Analysts were impressed with the company’s first-half performance and are confident this can continue due to its exposure to younger consumers. The younger demographic is not as hard hit by inflation and rising interest rates.

Accent delivered record sales and profit in the first half of FY23. NPAT soared 295.2% on the prior corresponding half, while EBITDA lifted 70.9%.

The post Invest in this 6% yielding ASX 300 dividend stock for passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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 Accent Group. 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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