The ASX dividend share Elders Ltd (ASX: ELD) has seen a sizeable valuation decline since 2022, as the chart below shows. This could be a buying opportunity, in my view.
The agricultural business has operations across a wide variety of areas, including farming sector retail products, wholesale products, livestock and wool agency services, storage and handling of wool, feed lots for cattle, real estate sales agency and property management services, financial services (including insurance), digital and technical services (including investments in AuctionsPlus and the Clear Grain Exchange online trading platforms), and own-brand agricultural chemicals and animal health products.
In summary, it's heavily involved in Australia's agricultural sector and associated services.
Following the decline of the Elders share price, it could now offer a very large dividend yield for investors by FY27.
Passive income projections
Payouts are decided based on how much profit a company generates as well as how generous the board of directors is feeling.
According to the projection on CMC Markets, the business is forecast to increase its annual payout per share to 36.5 cents. Following that, the ASX dividend share could grow its dividend to 39.5 cents per share in the 2027 financial year.
Using the valuation at the time of writing, this translates into a potential grossed-up yield of 8% including franking credits or 5.6% excluding the franking credits.
Let's take a look at why now could be a good time to invest in the agricultural business.
Strong outlook for the ASX dividend share?
The earnings per share (EPS) forecasts on CMC Markets suggest the business could deliver 58.2 cents of EPS in FY26 and then 63 cents of EPS in FY27. Based on those projections, the Elders share price is valued at just 11x FY27's estimated earnings.
When Elders announced its FY25 result, it gave some comments regarding FY26:
Elders is optimistic about the outlook for FY26, supported by a forecast recovery from dry conditions in South Australia and Victoria, as well as the commencement of benefits following implementation of our new retail system. In addition, we welcome Delta Agribusiness to Elders, expanding our Rural Products business in FY26.
The outlook and fundamentals for Australian livestock remain sound with prices for sheep and cattle forecast to be supported by strong international demand against a backdrop of tightening supply, especially from regions recovering from drought. The outlook for the regional residential property market remains positive, benefitting from stabilisation of interest rates at lower levels.
Elders will continue to invest in strategic initiatives, in line with its Eight Point Plan, while maintaining a focus on cost and capital efficiency.
With that in mind, I think the ASX dividend share could be a good under-the-radar buy for long-term investors.
