1 incredibly cheap ASX dividend growth stock to buy now and hold for decades

The Dicker Data Ltd (ASX: DDR) share price is edging higher in Friday trade.

At the time of writing, shares in the technology distributor are up 0.93% to $8.69.

Despite the modest rise today, Dicker Data shares have pulled back significantly in recent months. The stock is down about 16% over the past week and roughly 15% year-to-date, leaving it trading well below recent highs.

For long term investors seeking reliable income and growth, that weakness could be creating an opportunity.

Let’s take a closer look at why this ASX dividend stock may be worth considering.

A proven dividend payer

One of the biggest attractions of Dicker Data is its long track record of returning cash to shareholders.

The company pays quarterly fully franked dividends, which is relatively uncommon on the ASX. Over the past several years, it has consistently distributed a large portion of its earnings.

For example, the company recently declared a final dividend of 11.5 cents per share, continuing its steady stream of payments. Across FY25, fully franked dividends totalled 44 cents per share.

Dicker Data recently reviewed its dividend policy and confirmed it plans to distribute between 80% and 100% of net profit after tax (NPAT) to shareholders, subject to cash and capital requirements.

At current prices, the stock offers a dividend yield of around 5.1%, supported by those regular quarterly payments.

Positioned to benefit from rising IT spending

Beyond dividends, Dicker Data also benefits from long-term growth in technology spending.

The company distributes hardware, software, cloud infrastructure and cybersecurity products to resellers across Australia and New Zealand. This places it in the middle of a major and expanding industry.

According to Gartner forecasts, IT spending in Australia is expected to reach about $172.3 billion in 2026, representing 8.9% growth year-on-year.

Demand is being driven by several structural trends including cloud computing, artificial intelligence (AI), cybersecurity and data centre expansion.

Dicker Data is also positioning itself for the next phase of growth in AI. The company has been working with partners such as Dell Technologies and Cisco to develop AI infrastructure solutions, including new AI platforms expected to roll out in the first-half of 2026.

If businesses continue upgrading their technology systems, Dicker Data should remain well placed to benefit.

Foolish bottom line

Dicker Data may not always attract the same attention as some high profile technology companies. But its business model is simple, profitable and cash generative.

The company has a strong reputation with major technology vendors and has built a network that supports thousands of resellers across Australia and New Zealand.

Combined with reliable earnings and quarterly dividends, Dicker Data offers investors attractive income potential. It also provides exposure to long term growth in technology spending.

With the Dicker Data share price well below recent highs, long-term investors may see today’s weakness as a chance to buy.

The post 1 incredibly cheap ASX dividend growth stock to buy now and hold for decades appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 positions in and has recommended Dicker Data. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.