1 ASX dividend stock down 49% I’d buy right now

The ASX dividend stock Regis Healthcare Ltd (ASX: REG) has fallen a huge 49% from its high just over a year ago and this looks like a great time to invest.

Regis is one of the largest aged care operators in Australia. It provides services to more than 10,000 older Australians through residential aged care homes, home care service hubs, day therapy, respite centres and retirement villages.

Some of the decline happened earlier this month after the company noted that the Australian National Aged Care Classification (AN-ACC) starting price will increase 2.55% from $295.64 to $303.19, starting 1 October 2026.

The government also announced that the hotelling supplement will remain unchanged at $22.15 per resident per day.

Regis Healthcare said that the price increase is significantly below cost inflation in the sector and the broader economy.

I think the ASX dividend stock is a buy for multiple reasons.

Significantly cheaper

It’s clear that conditions in the short-term are more challenging for Regis Healthcare, but I think the share price has more than made up for that.

It has fallen by roughly half in the space of a year. A share price is meant to reflect a company’s long-term future potential. I don’t think its long-term prospects have worsened by around 50%.

The company is still benefiting from the long-term tailwind of Australia’s ageing population. In FY26, its total occupied bed days increased 8.4% to 2.85 million, with its average occupancy increased by 0.7 percentage points to 95.8%.

FY26’s aged care revenue per occupied bed grew 6.7%, while aged care staff expenses per occupied bed rose 8.3%.

FY26 underlying operating profit (EBITDA) climbed 10% to $138 million, underlying net profit grew 4% to $55.6 million, and statutory net profit rose 14% to $55.7 million.

After falling so far, the business now trades at a much more appealing price/earnings (P/E) ratio.

According to the forecast on Commsec, the Regis Healthcare share price is now valued at 28x FY27’s estimated earnings.

Regis Healthcare said the industry requires 10,000 new beds per year to meet potential demand. In 2025, the industry added around 800 beds, falling well short of that target. As one of the big players in the sector, the ASX share will be an important player in meeting that demand in the coming years.

Mitigating actions to help protect against margin reduction

While the latest price update for aged care providers may not match expense growth, it will partially offset the rise in costs. Plus, the ASX dividend stock is undertaking a range of initiatives to mitigate ongoing margin pressures.

Its initiatives include an increase to room prices, a rollout of ‘higher everyday living fee (HELF)’ services, other revenue optimisation, and operational efficiency initiatives.

Hopefully those ideas will help reduce the burden of increased costs, without reducing service at its homes.

Pleasing dividend credentials with the ASX dividend stock

I’m not expecting a dividend increase from the business every year, though it has increased its annual payout each year for the last four consecutive years.

FY27 could see a reduction based on likely reduced profitability, but then projections suggest a return to regular dividend growth in the subsequent years.

According to the projection on Commsec, it could pay an annual dividend per share of 15.1 cents in FY27. That’d be a grossed-up dividend yield of 4.6%, including franking credits.

The FY29 annual dividend is projected to be 19.2 cents per share – larger than the FY26 dividend. This would be a grossed-up dividend yield of 5.8%, including franking credits.

I believe the ASX dividend stock’s payout could grow materially over the next five to ten years as ageing-demographic tailwinds continue to strengthen. This could be a good time to pounce.

The post 1 ASX dividend stock down 49% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares tipped to grow 30% or more in the next 12 months
• 9 ASX shares downgraded by experts post-results this week
• 40 ASX shares with ex-dividend dates next week
• Regis Healthcare reacts to government funding change
• Regis Healthcare reports higher FY26 profits and dividend

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.