ASX dividend stock Lovisa Holdings Ltd (ASX: LOV) could be one of the most appealing buys within the S&P/ASX 300 Index (ASX: XKO) right now. After falling 52% since August 2025, as the chart below shows, the business is trading at much better value.
Lovisa sells affordable jewellery through its global store network that's across every continent. It also has a start-up business called Jewells in the UK.
A jewellery retailer may not instantly strike investors as a good opportunity, but it has already demonstrated a very strong capability to deliver pleasing and growing dividends.
Let's take a look at what makes it an appealing buy today after its fall.
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Strong passive income credentials
The business has already delivered massive dividend payout growth over the past decade. The total of its last two dividends has increased by close to 10x compared to the annual payment in 2016.
I'm not expecting the dividend to grow by another ten times in the upcoming decade, but I do think that its store growth and total sales growth will help send the Lovisa share price and dividend substantially higher in the coming years.
Broker UBS projects that the business could pay an annual dividend per share of 79 cents in FY26. That would be a dividend yield of 3.8%, excluding the effect of any franking credits.
UBS then suggests that the ASX dividend stock could then pay an annual dividend per share in FY27 of 93 cents – a rise of 17.7% year-over-year. That translates into a possible dividend yield of 4%, excluding any franking credits.
The broker thinks the Lovisa payout could continue climbing each year to FY30, reaching a potential payment per share of $1.33. This would be an increase of 68% compared to the estimated FY26 payout. The forecast payout would translate into a dividend yield of 6.4% by FY30, excluding franking credits.
In my mind, there are few ASX dividend shares capable of providing a dividend yield of around 4% (or more) in FY26 and delivering a strong rate of growth over the next few years.
Why this is a good time to invest in the ASX dividend stock
I doubt there will be many times that the share price will decline 50%. It currently looks like an especially attractive buying opportunity for long-term returns.
The FY26 half-year result delivered compelling growth, with 85 new stores opened to end the period with 1,095 locations. Underlying revenue grew 22.7% to $498.1 million and underlying net profit increased 21.5% to $69.6 million.
It's difficult to say how much the current events in the Middle East will affect its financials in FY26 and FY27, but I'm confident about the long-term.
Based on the current profit predictions by UBS, it's valued at just 21x FY27's estimated earnings. With its global growth plans and the potential for its margins to steadily climb higher thanks to operating leverage, I think the long-term still looks very bright.
