The S&P/ASX 200 Index (ASX: XJO) stock Premier Investments Ltd (ASX: PMV) could deliver the sizeable and growing passive income that Australians may be looking for.
Following multiple RBA rate cuts in 2025 to date, the return offered by cash savings in the bank account looks noticeably weaker and less appealing.
Premier Investments, the owner of Smiggle, Peter Alexander and an investment in Breville Group Ltd (ASX: BRG), is a pleasing option for dividend income.
When a business has a solid starting dividend yield, with projections for more growth, it could be an attractive option to unlock $200 of passive income per month.
After the business delivered an annual dividend per share of 50 cents in FY25, the outlook is positive for future payout growth.
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Dividend projection for FY26
Following the sale of Premier Investments' apparel brands to Myer Holdings Ltd (ASX: MYR), the business is smaller but with a greater focus on global growth potential.
Broker UBS is projecting that Premier Investments could generate earnings per share (EPS) of $1.17 in the 2026 financial year. With that profit generation, the ASX 200 stock is forecast by the broker to pay an annual dividend per share of 76 cents, representing a year-over-year increase of 52%.
I don't think many ASX 200 shares are capable of a dividend hike of more than 50% in the 2026 financial year.
At the time of writing, that payout would translate into a dividend yield of 3.9%, excluding franking credits.
Let's take a look at how that could help deliver $200 of monthly dividends.
$200 of passive income per month
Premier Investments doesn't pay a dividend every month – it typically pays every six months.
Therefore, I think it's better to think of the goal as an annual total of $2,400 and then divide it by 12.
If an investor wanted $2,400 of dividends in FY26, that would require owning 3,158 Premier Investments shares.
Investors would also receive franking credits on top of these cash dividend payments.
Pleasingly, UBS is forecasting the company's annual dividend per share could increase each year between FY26 and FY30. The projections suggest an annual dividend of 87 cents per share in FY27, 96 cents per share in FY28, $1.03 per share in FY29 and $1.09 per share in FY30.
Is this a good time to invest in the ASX 200 stock?
The broker UBS certainly thinks it is a good time to buy, with a buy rating and a price target of $24. That suggests a solid double-digit rise over the next 12 months, if the company's forecast comes true.
I'm excited by the company's potential to grow Peter Alexander earnings in both ANZ and the UK. Plus, I like the company's investment in Breville, which also provides global earnings growth exposure.
