The ASX dividend stock JB Hi-Fi Ltd (ASX: JBH) has fallen 34% since October 2025, as the chart below shows. I think this is a great time to invest in the business because a lower valuation offers a more compelling dividend yield.
JB Hi-Fi is a leading electronics and appliances business with four different businesses – JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys and E&S Trading.
The company has a lot to offer investors who want passive income, so let's look at why it's an appealing buy.
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Appealing ASX dividend stock characteristics
One of the aspects I like to look at when it comes to dividend ideas is whether a company has a history of increasing its payout. I want to have a fairly high level of confidence that my investment is going to increase its dividend in any given year. If it's increasing the payout, then it's not decreasing it.
JB Hi-Fi grew its dividend every year between 2013 and 2022. The inflationary and high interest rate environment led to a slight reduction in 2023 and it has grown its payout each year since then.
So, over the last 13 years, the business has increased its dividend numerous times.
In the FY26 half-year result, JB Hi-Fi hiked its dividend per share by 23.5% to $2.10 following a 7.1% rise in earnings per share (EPS) to $2.80. I'm not expecting the next two dividend payments to grow as much as 20%, but the dividend yield could remain strong.
According to the projection on Commsec, JB Hi-Fi is expected to deliver a pleasing payout in FY26, with an estimated annual payment of $3.41, which translates into a potential grossed-up dividend yield of 6.25%, including franking credits, at the time of writing.
Pleasingly, the JB Hi-Fi dividend per share is expected to rise to $3.51 per share in FY27 and then $3.83 per share in FY28.
Why this looks like a good time to invest
The ASX dividend stock is a top performer in the retail sector. It's usually a good idea to own the leader in the industry.
JB Hi-Fi highlights multiple competitive advantages, including its scale (as the number home consumer electronics and home appliances), a low-cost operating model (including a highly productive floor space of sales per square metre), its multichannel capabilities, and the people and culture.
It's understandable that some investors treat the JB Hi-Fi share price as a cyclical name exposed to discretionary spending. But, I think spending on devices like smartphones and appliances is more defensive than some investors are giving it credit for, therefore the large decline of the JB Hi-Fi share price could be an opportunistic time to invest.
According to Commsec, the business is now valued at 17x FY26's estimated earnings.
