If it's reliable passive income you're after, then you may want to have look into S&P/ASX 200 Index (ASX: XJO) dividend stock Metcash Ltd (ASX: MTS).
Shares in the wholesale food, liquor and hardware distributor are up 4.4% in afternoon trade today, changing hands for $3.54 apiece.
While this leaves shares down 6.4% over 12 months, the Metcash share price is now up 13.1% in 2025.
As for that passive income, the ASX 200 dividend stock paid a fully franked final dividend of 8.5 cents per share on 27 August. Eligible investors will have seen the interim dividend, also 8.5 cents per share, land in their bank account on 29 January.
With a full-year payout of 17 cents per share, Metcash currently trades on a fully franked trailing dividend yield of 4.8%.
On the income reliability front, Metcash has paid two fully franked dividends every year since 2017.
And according to Shaw and Partners' Jed Richards, the ASX 200 dividend stock represents "an undervalued option" (courtesy of The Bull).
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An 'overshadowed' ASX passive income stock
"This stock appeals to income focused investors as it was recently offering a dividend yield of around 5% at a time when interest rates on bank deposits are falling," said Richards, who has a buy recommendation on the ASX 200 dividend stock.
He noted that most income investors will be familiar with ASX 200 supermarket giants Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL). But Metcash often slips under the radar.
"Often overshadowed by Woolworths and Coles, Metcash delivers a steady performance in food, liquor and hardware distribution," Richards said.
"Its defensive business model make it a reliable, undervalued option in Australia's retail sector," he concluded.
What's the latest from the ASX 200 dividend stock?
The Metcash share price is outperforming today following the release of a strategic update this morning.
The ASX 200 dividend stock revealed plans to merge its Independent Hardware Group (IHG) and Total Tools businesses into the Total Tools and Hardware Group.
The newly merged business will include household names such as Mitre 10, Home Hardware, and Total Tools.
"Combining the two businesses underpins our commitment to maximise the opportunities for profitable growth in the sector," Metcash CEO Doug Jones said.
The ASX 200 stock also provided its full-year FY 2025 earnings guidance today.
The company expects to achieve earnings before interest and tax (EBIT) in the range of $504 million to $508 million.
Management is forecasting full-year underlying profit after tax of between $273 million and $277 million.
