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There is a wide range of ASX dividend stocks, from blue chips to ASX growth stocks that pay out solid dividends.
I think there are some names that are small enough to have a big growth trajectory but are already profitable enough to give good dividends.
In my opinion, the businesses that are growing at a good rate are the ones that can generate the strongest returns over time thanks to compounding.
With that in mind, here are three of my top ideas for ASX dividend stocks to achieve growth at current prices.
Premier Investments Limited (ASX: PMV)
Premier Investments is one of the most compelling retailers on the ASX in my opinion. It has plenty of brands you’d find in a Westfield Australian shopping centre, such as Just Jeans, Jay Jays and Peter Alexander.
But, there are two parts of Premier Investments that I am particularly drawn to – Smiggle and Breville Group Ltd (ASX: BRG). Smiggle is a retailer focused on school children that sells a variety of branded products such as bags, pencil cases and the like. The products have brand image from some of the most popular brands including Marvel and Minecraft.
Management is pleased with Smiggle’s performance since the COVID reopening. It is looking to grow in regions such as Europe and Asia. The business is looking to “maximize growth in EBIT (earnings before interest and tax).
It owns 25.6% of Breville, the world’s fastest growing kitchen products business. Although this is not an article about Breville, I think this business is successful in increasing the addressable global market and expanding into new countries.
Premier retail sales were up 42.8% year-on-year in the first 12 weeks of 2013.
The ASX dividend stock is expected to pay a gross dividend yield of 5.8% in FY23.
Universal Store Holdings Ltd (ASX: UNI)
Universal Store owns a “portfolio of high-end youth fashion brands,” which it can sell through its retail stores, online and wholesale. It owns the Universal Store and THRIILLS businesses, while also piloting the Perfect Stranger brand as an independent retail concept.
She continues to open new stores. Universal Stores recently announced that it plans to open two new stores before Christmas, as well as four to five more stores in the second half of 2023.
In FY23 for the 21 weeks to 20 November 2022, the group’s total sales (excluding THRILLS) were up around 40%, while it also reported an improvement in gross profit margins.
The company anticipates that favorable trading conditions could continue in the post-lockdown environment.
Based on estimates on Commsec, Universal Store’s share price is valued at 11 times FY24 estimated earnings with a potential dividend yield of 8.4%.
Beacon Lighting Group Ltd (ASX: BLX)
Beacon Lighting might not seem like a business with a lot of growth potential, but I think it does, especially at the starting point of valuation where Beacon Lighting’s share price is down 30% year to date.
The shorter term could be a bit volatile with a possible slowdown in housing construction in Australia on the back of rising interest rates.
Beacon Lighting ended the 22nd year with 117 company stores and two franchise stores. Research by the company identified the potential of 184 Beacon Lighting stores in Australia. This indicates a possible increase of over 50%.
He is looking to increase trade sales. Beacon’s commercial sales were up 15.8%. Trade club members increased by 7,800 to 52,000 members. It acquires new trade products to create a comprehensive range of products for its trade customers.
The ASX dividend stock has launched a Beacon Lighting consumer business website in the US to build a presence in the US market. Beacon Lighting USA saw FY22 sales grow 51.9%, albeit from a relatively small base.
FY22 Beacon international sales rose 27.9% to $15.7 million. It has established an online ceiling fan sales channel in China with Tmall Global. The company expects a continued expansion of the products designed in Australia to markets in the US, China, Asia and Europe.
According to Commsec, Beacon Lighting’s share price is valued at 13 times estimated FY23 earnings with a potential dividend yield of 5.9% for FY2023.