1 ASX dividend stock down 43% I’d buy right now

The ASX dividend stock Premier Investments Ltd (ASX: PMV) has fallen a painful 43% from its 52-week high in September 2025, as the chart below shows. This could be a great time to invest, in my view.

To put it mildly, that’s not ideal for shareholders. But, investing is a long-term endeavour and I think this is a great time to buy (more) Premier Investments shares.

‘Premier Investments’ is not exactly a household name, but many Australians have probably heard of one or more of its key businesses/assets.

It owns the pyjamas business Peter Alexander, the children’s accessories business Smiggle, and a substantial stake in the coffee machine company Breville Group Ltd (ASX: BRG).

Why it’s a good ASX dividend stock

Between 2011 and 2024, the business had a great track record of regularly increasing the payout, aside from the painful year of 2020, which impacted many ASX dividend stocks.

Premier Investments is a different business now, after divesting a number of its apparel businesses (like Just Jeans and Jay Jays) to Myer Holdings Ltd (ASX: MYR).

I think Premier Investments is a higher-quality company with more growth potential because Peter Alexander and Breville are a larger part of the Premier Investments pie.

In this new era for the business, I think the outlook is very positive for long-term earnings growth and good dividends.

The business paid an interim dividend of 45 cents per share in the FY26 half-year result. The projection on CMC Invest suggests that the business could pay an annual dividend per share of 76 cents.

At the time of writing, that translates into a potential grossed-up dividend yield of 8.3%, including franking credits. Plus, the projections on CMC Invest suggest the business could slightly increase its payout in FY27 and FY28 as well.

Why this is a good time to invest

The most obvious answer to why to invest now in the ASX dividend stock is because the Premier Investments share price is down heavily (more than 40%) – it’s good to be greedy when the market is fearful, after all.

Discretionary retail can be a volatile sector, so investing during the difficult times can be a smart play because of how much better value we can get.

Secondly, it’s good to focus on growing businesses. Peter Alexander and Breville are consistently growing revenue, while expanding their geographic reach. Peter Alexander added four new stores in the first half of FY26, while HY26 sales increased 4.9% year-over-year.

I’m also hopeful that the business can grow pleasingly in the UK (following the launch of a few stores in London), while also exploring “international wholesale opportunities with global best-in-class wholesale partners”.

I think Peter Alexander is very capable of growing its profit margins in the coming years thanks to strengthening scale benefits. Smiggle is performing weakly, but I’d rather invest now rather than when/if it returns to solid growth.

Using the earnings forecast on CMC Invest, the Premier Investment share price is valued at less than 14x FY26’s estimated earnings.

The post 1 ASX dividend stock down 43% I’d buy right now appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Breville Group. 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 Myer and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.