If you're hunting for a high-quality Australian dividend stock that has fallen out of favour with the market, then Endeavour Group Ltd (ASX: EDV) could be one of the most compelling opportunities on the ASX today.
The liquor, hotels, and hospitality operator is sitting 20% below its 52-week high, with its shares ending yesterday's session at $3.68.
While investors have been cautious due to elevated promotional activity in the retail liquor market and short-term earnings pressure, recent developments suggest that Endeavour could be setting up for a meaningful recovery.
Here's why this Australian dividend stock could be worth buying and holding for the long run.
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A dominant consumer powerhouse
Endeavour Group operates one of the largest and most recognisable retail and hospitality networks in Australia.
Its portfolio includes more than 1,675 liquor stores, including well-known brands such as Dan Murphy's and BWS, and 344 hotels nationwide, spanning bars, food venues, gaming, and accommodation.
In addition, it has a scalable omnichannel platform, with over 4.5 million active My Dan's members, in-house production capability through its Pinnacle Drinks division, and partnerships with more than 3,000 suppliers, most of them small Australian producers.
This combination of brand strength, national scale, and vertical integration gives Endeavour a defensive market position that should continue generating strong cashflow through economic cycles.
Signs of improvement
It hasn't been an easy time for this Australian dividend stock. Tough trading conditions and increased competition for Coles Group Ltd (ASX: COL), has weighed on its sales and profits. However, there have recently been signs of improvements.
Bell Potter notes that Endeavour's retail sales trajectory improved during the first quarter, with September delivering positive sales growth after a slow start to FY 2026. Targeted promotions during school holidays and the footy finals helped drive volumes, while online sales were particularly strong. They grew 20.9% during the quarter.
Hotels continued to perform solidly as well, supported by growth across bars, food, and accommodation. Its Pub+ offering now accounts for around 30% of food and bar transactions, demonstrating how digital integration is improving revenue mix and customer engagement.
Bell Potter also highlights that October retail sales remained positive, and promotional intensity in the liquor market is expected to stay elevated through the second quarter before easing later in the financial year.
Broker upgrade
Earlier this month, Bell Potter upgraded the Australian dividend stock to a buy rating with a $4.30 price target. Based on its current share price, this implies potential upside of 17% for investors over the next 12 months. It said:
We upgrade to Buy. We expect strong 2Q26e Retail sales growth to be underpinned by recent rate cuts, a softer comp following 2Q25 supply chain disruptions, and the growth observed in October. We believe growth in Retail will build positive momentum heading into the April/May strategy refresh, where muted expectations suggest a higher likelihood of an upside surprise.
In addition, the broker is expecting some attractive dividend yields from its shares.
Bell Potter is forecasting fully franked dividends of 19 cents per share in FY 2026, 20 cents per share in FY 2027, and 22 cents per share in FY 2028. This equates to dividend yields of 5.2%, 5.4%, and 6% respectively.
That's a total potential return of approximately 22%, which demonstrates why this could be a top Australian dividend stock to buy right now.
