The ASX dividend stock Lovisa Holdings Ltd (ASX: LOV) has dropped heavily over the last year. The Lovisa share price has dropped 50% since August 2025.

Lovisa is one of the world’s leading affordable jewellery businesses, with its global store network spread across every continent.

In fact, the business has at least 20 stores in each of the following countries: Australia, New Zealand, Malaysia, South Africa, the UK, France, Germany, Poland, USA and Canada.

There are multiple reasons why the ASX dividend stock looks really appealing to me. Let’s dive into it.

ASX dividend stock credentials

As a retailer, I think it would be unwise to think that the business can grow its dividend every single year. But the long-term trend is very compelling.

In FY19 – the last year before COVID-19 impacts – the business paid an annual dividend per share of 33 cents. That compares with the two most recent half-year dividends declared by the business, which amounted to 80 cents per share. In other words, in seven years, the Lovisa dividend has grown by approximately 140%.

At the time of writing, its most recent dividends come to a dividend yield of 3.7%, excluding franking credits. Based on the latest dividend’s franking credit rate of 50%, that translates into a grossed-up dividend yield of 4.4%.

Lovisa may not have the biggest dividend yield around, but it’s dividend growth that could make it particularly attractive today.

The Commsec forecast suggests the company’s annual dividend per share could climb to 89 cents in FY27 and 95 cents per share in FY28.

Business growth to drive passive income growth

All the ASX dividend stock seemingly needs to do to grow its payout is expand its global store network, as this will broaden its customer reach and provide scale benefits.

In the FY26 half-year result, the business reported that the global Lovisa store count increased by 15.5% to 1,089. The Lovisa store network achieved revenue growth of 22.7% to $498.1 million and 21.5% growth of net profit after tax (NPTA) to $58.4 million.

The company has also opened a new business in the UK called Jewells, with a higher price point, which gives Lovisa another growth avenue.

But, the most growth is likely to be found in expanding store networks in countries where there’s clearly a growth avenue for more locations (based that market’s population), such as the US, Mexico, Italy, the Netherlands, the UK, China, Germany, France and Canada.

According to the Commsec projection, the Lovisa share price is now valued at 21x FY27’s estimated earnings. If its earnings can continue growing, I think it’s got a very good chance of hiking the dividend in the years ahead.

The post 1 ASX dividend stock down 50% I’d buy right now appeared first on The Motley Fool Australia.

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

Megaport Ltd (ASX: MP1) shares had a standout FY 2026.

Over the 12 months to 30 June, the growing tech share rose almost 50%, while the benchmark ASX 200 index gained around 3%.

Let’s find out why the network services provider’s shares smashed the market.

The Latitude.sh acquisition changed the narrative

Megaport was already known for its network-as-a-service technology, helping businesses connect to cloud providers, data centres, and digital services.

But its acquisition of Latitude.sh pushed the company into a broader market.

Latitude.sh is a compute-as-a-service platform offering high-performance CPU and GPU infrastructure. That gave Megaport a new way to serve customers needing not only connectivity, but also the computing power sitting behind artificial intelligence (AI), cloud-native applications, and data-heavy workloads.

That shifted the market’s view of the company. Megaport was no longer just selling flexible digital connections. It was moving toward a platform combining compute, network, and storage.

In an AI boom, that suddenly looked much more interesting.

Contract wins backed up the strategy

The share price strength was also supported by major contract wins after the Latitude.sh deal.

In April, Megaport announced that Latitude.sh had secured a 36-month compute and storage contract worth approximately A$35.4 million. The company also said Compute annualised recurring revenue (ARR), excluding that contract, had lifted strongly since the acquisition.

The momentum then accelerated in May. Megaport announced three major GPU, CPU, network, and storage contracts across two US-based technology customers running AI applications and inference workloads. Those contracts had a combined total contract value of approximately A$254 million and were expected to add about A$90.6 million in ARR once fully deployed.

That was a major validation point. Investors could see the Latitude.sh acquisition turning into real contracted demand, not just a strategic idea.

AI infrastructure became the bigger opportunity

The excitement increased again in June, when Megaport announced four new major contracts with total contract value of approximately A$458.9 million and ARR of about A$199 million.

These contracts were linked to US-based technology providers running AI applications and inference workloads.

Megaport also announced plans for a globally distributed AI inference cloud, including an on-demand GPU pool. That pointed to a much bigger ambition: giving customers access to compute power closer to users, data, and cloud platforms.

The company backed this with an $827.3 million entitlement offer to fund new compute, network, storage, and GPU capacity.

Capital raisings can sometimes weigh on share prices. But in this case, investors had large contracts and strong AI demand to assess alongside the dilution.

A breakout year

Megaport shares smashed the ASX 200 in FY 2026 because its growth story became larger and more tangible.

The Latitude.sh acquisition gave the company compute exposure, while the contract wins showed real demand from AI-related customers.

It is worth remembering that Megaport still has to deploy capital well, deliver hardware, manage customer concentration, and prove that these contracts convert into attractive returns.

But FY 2026 clearly was the year Megaport moved from cloud connectivity story to AI infrastructure contender, and the share price unsurprisingly followed.

The post Why did Megaport shares smash the ASX 200 in FY26? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. 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.

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week in positive territory. The benchmark index rose 1.4% to 8,844.4 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set for a poor start to the week despite a strong session in Europe on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 35 points or 0.4% lower. In the United States, Wall Street was closed for a public holiday. In Europe, the DAX was up 0.8%, the FTSE rose 0.25%, and the CAC climbed 0.4%.

Oil prices edge higher

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a reasonably positive start to the week after oil prices edged higher on Friday night. According to Bloomberg, the WTI crude oil price was up 0.15% to US$68.78 a barrel and the Brent crude oil price was up 0.45% to US$72.12 a barrel. This was despite OPEC approving further output increases.

Austal shares given hold rating

Bell Potter thinks Austal Ltd (ASX: ASB) shares are fully valued at current levels. This morning, the broker has retained its hold rating on the shipbuilder’s shares with a heavily reduced price target of $4.10 (from $6.30). Bell Potter said: “We downgrade our FY27-29e underlying earnings but upgrade statutory reflecting incorporation of MMF3/GDEB revenue. Our TP is lower on FY27 uEBIT downgrade. Although the valuation/growth arithmetic appears attractive, we believe we are entering a period of elevated risks as ASB ramps up several shipbuilding programs. A T-AGOS contract modification presents a potential near-term positive catalyst.”

Gold price storms higher

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a solid start to the week after the gold price stormed higher on Friday night. According to CNBC, the gold futures price was up 1.5% to US$4,187.3 an ounce. This was driven by traders scaling back their interest rate hike bets.

Buy ResMed shares

Morgans has named ResMed Inc. (ASX: RMD) shares as a buy. According to the note, the broker has retained its buy rating and $41.72 price target on the medical device company’s shares. It thinks recent weakness has created a buying opportunity. The broker commented: “RMD has de-rated to ~16x forward earnings, its lowest valuation since the post-GFC period, despite consensus continuing to forecast double-digit EPS growth. GLP-1 therapies, positive Phase III data from Apnimed’s oral OSA therapy, the prospect of Philips re-entering the US PAP market from 2027 and broader healthcare sector de-rating, have driven recent share price weakness. While these risks are real, current industry data and RMD’s operating performance provide limited evidence of a material deterioration in underlying demand. We make no changes to FY26-28 forecasts or our A$41.72 target price. BUY.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in ResMed and Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.