Buying ASX dividend stocks at cheap value makes a lot of sense. That's why I think the business Universal Store Holdings Ltd (ASX: UNI) is very appealing after its 19% decline since late February 2026, as the chart below shows.
It may not be one of the most well-known dividend businesses out there, but I think it has significant potential. It's a retailer of what it describes as premium youth fashion brands, including Universal Store, Perfect Stranger, and the CTC business (with the THRILLS and Worship brands). It has more than 120 stores across Australia.
Let me explain why it's such an appealing ASX dividend stock today.
Image source: Getty Images
Great dividend track record
The ASX dividend stock began paying dividends to shareholders in 2021 and has continued to increase its annual payout each year since.
Universal Store's latest result was the FY26 half-year result – it hiked its interim payout by 18.1% to 26 cents per share. I'm not expecting the company to continue increasing its payout at that pace every year forever, but it shows it is delivering excellent passive income growth for investors.
There are plenty of ASX blue-chip shares that have given investors a dividend reduction in the last five years, but Universal Store has not.
According to the projection on CMC Invest, the business is forecast to pay a dividend that equates to a grossed-up dividend yield of close to 8%, including franking credits, with further (but slower) growth projected for FY27 and FY28.
There are not many ASX dividend stocks with a yield of around 8% (or more) that are expected to grow their payout in high single-digit terms in the coming years.
Why this is a good time to buy the ASX dividend stock
The business is doing all the right things to grow its sales and earnings in a number of ways.
For starters, it's achieving ongoing sales growth through both good like-for-like sales at existing stores and expansion of its store network.
Its FY26 retail sales through week 43 were solid. Universal Store delivered sales growth of 11.8%. Perfect Stranger's like-for-like (LFL) sales grew 12.9%, while total sales growth came to 39.8%. CTC LFL sales increased 3.8%, while total sales increased 14.5%.
During FY26, Universal Store has opened four new stores and Perfect Stranger opened seven new stores.
The company expects total FY26 sales to grow by approximately 11.5%, while underlying operating profit (EBITA) could grow by 15.4%. As we can see, profit margins are expected to improve, which helps the bottom line grow faster, and this is what funds those rising dividends.
It has shown great skill at growing earnings and dividends over the years – I think this is a good time to invest in the ASX dividend stock, along with a few other names.
