If you are looking for the winning combination of major upside potential and an above-average dividend yield, then read on.
That's because Bell Potter thinks the ASX dividend share in this article offers both.
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Which ASX dividend share?
The share in question is Universal Store Holdings Ltd (ASX: UNI).
It is the youth fashion retailer behind the Universal Store, Perfect Stranger, and Thrills brands.
Bell Potter highlights that Universal Store has released a solid trading update for the first 43 weeks of the financial year. It said:
Universal Store Holdings (UNI) provided a trading update for the first 43 weeks of FY26: group retail sales of +14% on pcp broadly in line with BPe, like-for-like (LFL) sales on pcp of +8.5% and +12.9% for key banners, Universal Store (US) and Perfect Stranger (PS) respectively. The improved growth rate from the last update at UNI's key banner, US (+8.1% at end of Apr vs +7.1% at mid-Feb) was supported by some benefit in comps in the pcp through Apr.
However, the wholesale business saw a pronounced decline YTD to book in another impairment charge (last in 1H25) given structural challenges with a longer dated recovery flagged. FY26 guidance of revenue at $368-375m (+11.5% at mid-point) and EBITA of $61.5-64.5m was provided, in line with Consensus implying gross margins remaining in line. FY26 new store openings were also tracking to the previous guidance of 11-17 across the three banners.
Big potential returns
According to the note, the broker has retained its buy rating on the ASX dividend share with a trimmed price target of $9.30 (from $10.50).
Based on its current share price of $7.11, this implies potential upside of 30% for investors over the next 12 months.
In addition, the broker is forecasting fully franked dividend yields of 5.2% in FY 2026, 5.5% in FY 2027, and then 6.3% in FY 2028.
Commenting on its buy recommendation, Bell Potter said:
At 13x FY27e P/E (BPe), we see an entry opportunity to a high-quality retailer as we remain optimistic on UNI's performance in 4Q26 given supportive comps and look forward to FY27e in delivering continued execution driven market share expansion across retail banners. In line with selective consumption trends across the broader sector, we retain our views of the youth customer prioritising ontrend streetwear and expect UNI to benefit with their leading position. Maintain BUY.
