ASX dividend stocks are particularly attractive right now because of the large dividend yields on offer. Elevated inflation and higher interest rates may mean that investors are looking for additional income to offset that rise in costs.
The best thing to do, in my view, is to look for businesses that grow their payouts over the long-term. In that sense, I think it's a good idea for an undervalued stock with a good dividend yield that can also deliver rising earnings.
That's why I'm particularly attracted to the ASX dividend stock Sonic Healthcare Ltd (ASX: SHL), which is down around 30% since August 2025.
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Great credentials of an ASX dividend stock
One of the best things about the ASX healthcare share is that it has provided investors with regular dividend growth. Over the last 30 years, the business has increased its annual payout in most years, including every year of the last decade.
In the FY26 half-year result, Sonic increased its interim dividend per share by 2.3% to 45 cents. The company's board of directors has decided on a progressive dividend policy – the HY26 dividend was increased by 1 cent per share.
The last two dividends declared by the business equate to a dividend yield of 5.3%, or almost 7%, including franking credits, at the time of writing.
While the business isn't growing its dividend per share at a fast pace, it's being very consistent for shareholders.
Ongoing earnings growth
The business continues to deliver solid earnings growth. I'd say it's benefiting from growing and ageing populations in its core markets of Germany, Australia, the USA, Switzerland and the UK.
In the FY26 half-year result, it reported revenue growth of 17%, operating profit (EBITDA) growth of 10% to $907 million, net profit growth of 11% to $262 million and operating cash flow rose 10% to $682 million.
Within those numbers, the ASX dividend stock delivered organic revenue growth of 5%, which is a pleasing rate of expansion.
Sonic Healthcare reported in the HY26 result that operating leverage and synergies from acquisitions – demonstrated by EBITDA margin enhancement for the majority of the business. It also said that it has an ongoing focus on cost control.
The company noted that it's undertaking an operating review of US business, including "rationalisation of anatomical pathology operations". In other words, it's looking to grow profit by making some decisions with the US business.
Valuation
According to the projection on Commsec, the Sonic Healthcare share price is valued at 17x FY26's, which I think looks cheap given how defensive it is and the likelihood of further earnings growth.
