The ASX dividend stock Beacon Lighting Group Ltd (ASX: BLX) has fallen 55% since June 2025, as the chart below shows. I think this is a great time to invest while the price is low.
Beacon Lighting is one of Australia's leading retailers of lighting (and fans). It also has a trade division, owns a portfolio of properties, and sells some products internationally.
After such a large decline, I think the business is now significantly undervalued.
Firstly, let's look at the passive income potential of the business.
Image source: Getty Images
Dividend projections
I believe an ASX dividend stock needs to provide investors with an attractive payout straight away to qualify as an appealing dividend option. I'd also want to have a decent level of confidence that payments can grow in the future to help offset inflation and help us become wealthier.
According to the projection on CMC Invest, the business could pay a grossed-up dividend yield of 6%, including franking credits, at the time of writing. That's an attractive level of dividend income compared to what term deposits are currently offering.
Pleasingly, the dividend payouts are forecast to increase in the two subsequent years.
Including franking credits, the ASX dividend stock could pay a grossed-up dividend yield of 6.6% in FY27 and 7.3% in FY28.
Is this a good time to invest?
According to CMC Invest, of six analyst ratings within the last three months, four were buys, one was a hold rating and one was a sell rating. The average price target from those analysts was $2.22, which implies a possible rise of more than 30% from where it is at the time of writing.
It's clear that the business is facing challenging circumstances amid higher interest rates and inflation – this sort of environment hurts real estate and discretionary spending-related ASX shares. I think it's good to be greedy when the market is being fearful.
On top of that, the business had 130 Beacon Lighting stores at the end of the first half of FY26, but it's aiming for 217 over the long-term – it has a clear growth runway here.
I'm also hopeful of its long-term growth potential in regards to its international potential. HY26 Beacon international sales increased by 13.5%, with sales growth in all regions.
I think the business has a very attractive future and it looks undervalued at 13x FY27's estimated earnings, according to the forecast on CMC Invest.
