Over 7% dividend yield! Buy this ASX 300 share for passive income in 2023

dividend income expected to be paid by S&P/ASX 300 Index (ASX:XKO) share Accent Group Co., Ltd. (ASX:AX1) is very attractive.

Interest rates have jumped from last year and investors have earned more income from ASX stocks. But I think there is his ASX 300 dividend stock that still looks very attractive with a very high dividend yield.

In my opinion, Accent Group is one of those businesses with growth potential and high dividends.

It acts as an Australian distributor for many brands and owns others. Brands involved include Vans, Skechers, Dr Martens, Glue Store, Henleys, Hoka and The Athlete’s Foot.

How Much Dividend Income Will Accent Stocks Pay in 2023?

Accent plans to pay an annual dividend of 11.5 cents per share in FY23, according to Commsec.

Accent’s current share price suggests a potential grossed-up dividend yield of 7.5% over the next 12 months. However, it is only a guideline.

Thereafter, the annual dividend for ASX 300 shares is expected to increase to 12 cents per share in FY24 and 13.7 cents per share in FY25.

That means the gross-up dividend yield for FY24 could be 7.8% and the gross-up dividend yield for FY25 could be 8.9%.

However, based on FY23 earnings projections, the company’s payout ratio could be a healthy 78%. Businesses keep one-fifth of their profits to reinvest in more growth opportunities.

Recent progress

On January 25, 2023, the business announced total sales (including The Athlete’s Foot franchise stores) for the 27 weeks ended January 1, 2023 were $825 million, an increase of 39% .

Earnings before interest and taxes (EBIT) for the first half of FY23 are expected to be between $90 million and $92 million.

Management said trading conditions “continued to be very good” in November and December and that sales exceeded expectations.

Trading in January leading up to the announcement date was in line with expectations.

Why Buy This ASX 300 Dividend Stock?

Accent’s stock has recovered some of the decline since 2022, but is still down about 20% from its November 2021 high.

I believe the underlying profitability of the company continues to improve as the business expands its store network and adds brands to its portfolio. The wider the reach of potential customers, the stronger the footwear retailer stands.

Accent’s current share price is valued at less than 15 times estimated FY23 earnings and less than 14 times estimated FY24 earnings. I wish I had bought it a few months ago, but while paying a very high dividend, I think it still looks like it’s worth it for long-term growth.