The ASX dividend stock Inghams Group Ltd (ASX: ING) has gone through a rough time. It's down by 37% from its 52-week high and has dropped even further from its 2024 all-time high.
It has fallen so much that it's almost at its all-time low.
The business describes itself as the leading poultry business in Australia and New Zealand, with customers including major retailers, fast food operators, food service distributors and wholesalers.
While its core focus is chicken, it also claims to have strong market positions across the Australian turkey, Australian stockfeed and the New Zealand dairy feed industries.
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Why is the ASX dividend stock so much cheaper?
The business had a challenging FY25, with core poultry volume down 1.4%, revenue down 1.5% and underlying net profit down 11.6%. This led to a reduction of the annual dividend per share of 5% to 19 cents.
Inghams noted multiple impacts including a transition to a new Woolworths Group Ltd (ASX: WOW) supply agreement, a shift to a lower-margin mix, weaker wholesale pricing and softer overall retail demand.
The business said it's acting decisively to address the issues, reduce excess inventory, adjust production settings to match demand in each channel and implement structural cost reductions across the business. These initiatives are expected to underpin a stronger result in the second half of FY26 and beyond.
The full-year benefit of the cost-reduction program will be felt in FY27, alongside expected volume growth from expanded customer relationships and the full-year impact of contracts in FY26.
Inghams then said:
Together, these factors and all of our initiatives are expected to support an improvement in earnings over time, underpinned by an improved mix and a lower cost base.
While the ASX dividend stock has been impacted, it's clear the business has a plan to turn things around, so investing with a long-term mindset could mean buying at a cheap, beaten-up price today.
When share prices fall, the dividend yield can become much larger. So, let's take a look at what the FY26 payout (and beyond) could be.
Potential passive income payments
As I mentioned, Inghams paid an annual dividend per share of 19 cents, which translates into a grossed-up dividend yield of 11%, including franking credits, at the current Inghams share price.
However, if earnings decline a bit in FY26, which is expected according to the forecasts on Commsec, the dividend is forecast to decline a little in FY26 as well.
The 2026 financial year dividend is projected to drop to 17.5 cents per share, which translates into a grossed-up dividend yield of 10.3%, including franking credits.
The annual dividend per share is then expected to rise to 20.5 cents per share in FY27 and 25 cents per share in FY28.
If those projections come true, the poultry business could deliver significant passive income over the next few years as its earnings recover.
