If you are looking for a combination of major upside and a generous dividend yield, then read on!
That's because Bell Potter has just picked out one ASX stock that it believes offers both.
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Which ASX stock?
The stock that Bell Potter is positive on is Dexus Convenience Retail REIT (ASX: DXC).
It owns a portfolio of 91 service stations and convenience retail assets positioned alongside major roads on the Eastern Australian seaboard.
Bell Potter highlights that the Dexus Convenience Retail REIT is differentiated by the high-quality and long-term tenants that it leases these assets to, including Chevron, 7-Eleven, United, Mobil, and Ampol (ASX: ALD).
Commenting on the company, Bell Potter points out that buybacks are currently more attractive than developments. It explains:
Buyback currently more attractive than developments – With a 7.9% earnings yield and c. 6.3% marginal cost of debt, the buyback generates a +1.6% positive spread per dollar deployed. Glass House Mountains Stage 2 offers a 5-6% yield on cost – a negative spread to funding costs, albeit with +1% NTA uplift. We estimate +0.4% FFO/share accretion in FY27 on completion of the remaining buyback, representing upside risk to our forecasts.
The broker has also been looking at electric vehicle adoption and the impact this may have on its service station tenants. It adds:
Tenants resilient in face of EV headwinds. While EVs reached 20% share of new vehicle sales in May 2026, fuel volumes and margins remain above pre-COVID levels. Non-fuel gross profit per site continues to grow, with Viva Energy (21% of DXC income) reporting +1.4% gross margin improvement to 38.8% in Q1 CY26.
Big total returns
According to the note, Bell Potter has retained its buy rating on the ASX stock with a trimmed price target of $3.15 (from $3.25).
Based on its current share price of $2.67, this implies potential upside of 18%.
In addition, Bell Potter is forecasting dividend yields of 7.9% in FY 2026, 7.7% in FY 2027, and then 8.2% in FY 2028.
Speaking about its investment thesis, the broker said:
We maintain our Buy rating on DXC and lower our target price to $3.15. The buyback and developments offer attractive long-term returns, despite the short-term headwinds from rising bond yields. With our revised forecasts DXC is yielding 7.9% vs. 6.4% passive REIT average which we think offers compelling risk adjusted value, and at an implied 8.21% cap rate, despite recent asset sales supporting book value.
