Looking for an S&P/ASX 200 Index (ASX: XJO) dividend stock paying a solid, reliable yield with the potential for some significant share price gains in the months ahead?
Then you may wish to run your slide rule over electronics retailer JB Hi-Fi Ltd (ASX: JBH).
Despite dipping 0.5% in intraday trade today to $94.77 a share, the JB Hi-Fi share price is up a benchmark-smashing 48.3% over 12 months.
Atop those gains, JB Hi-Fi also paid out $3.53 a share in fully franked dividends to eligible stockholders over the year.
At the current share price, that sees this quality ASX 200 dividend stock trading on a 3.7% fully franked trailing yield.
And according to Macquarie Group Ltd (ASX: MQG), there could be more outperformance to come.
ASX 200 dividend stock in the technology sweet spot
In Macquarie's March small and mid-cap ASX stocks best picks list, analyst Caleb Wheatley gives JB Hi-Fi shares an outperform rating. Macquarie has a $111.00 price target on the ASX 200 dividend stock, representing a potential upside of just over 17% from current levels.
Noting that consumers continue to prefer technology, Wheatley said, "Since COVID, we have seen consumer behaviour towards technology shift, as it increasingly becomes a necessity in the household."
Wheatley added:
In addition, the replacement cycle of technology is generally five to seven years, and with COVID being a key driver of tech upgrades, we see the next couple of years as key to device/appliance replacement.
JBH's sales metrics have evidenced its ability to execute on this opportunity, with strong sales trends persisting in CY25 to date.
The analyst is also bullish on the ASX 200 dividend stock due to its strong margin management.
Although the company could face foreign exchange headwinds, along with higher shipping costs and an increase in discounting, Wheatley said, "JB Hi-Fi has a strong track record of managing margins over the last decade, with gross margins being maintained in the 22% to 23% range over the last five-plus years."
Strong balance sheet should support future dividends
Wheatley also pointed out that JB Hi-Fi's strong balance sheet gives the company flexibility moving forward.
As at 31 December, the ASX 200 dividend stock had net cash of $551 million.
"JBH ended the 1H25 period net cash, and we expect this to continue into the full year, which could drive capital-management initiatives and deliver cash back to shareholders," Wheatley said.
"The strong balance-sheet position is also a positive in an uncertain macroeconomic environment," Wheatley added.
JB Hi-Fi increased its fully franked H1 FY 2025 interim dividend payout by 7.6% to $1.70 per share.
