1 ASX dividend stock down 47% I'd buy right now

The ASX dividend stock Pinnacle Investment Management Group Ltd (ASX: PNI) may not be as cheap as it was at the start of the 2026, but I reckon it's still great value today.  

As the chart below shows, it has dropped 30% from early August 2026 and it has fallen 47% from February 2025.

Pinnacle describes itself as a global multi-asset investment management platform. It's substantially domestic and expanding globally, as it compounds earnings and cash flow generation through cycles.

It makes investments in fund managers, called affiliates. It has a portfolio of 19 affiliates across public and private markets, spanning asset classes, investment styles and geographies.

I think it's a great time to invest in Pinnacle for a few different reasons, starting with the dividend yield on offer.

Strong passive income

The business decided to pay an annual dividend per share of 60 cents in FY26, the same as FY25.

At the time of writing, that dividend yield is 4.4% excluding franking credits and 5.7% including franking credits.

That's not the biggest dividend yield on the ASX, but it's a solid starting point for an ASX dividend stock, and I expect further growth as the company's funds under management (FUM) grow.

Strong funds under management performance

The company is performing strongly for shareholders, with total FY26 net inflows of $33.4 billion, up 44% year over year.

This enabled the business to report that aggregate affiliate FUM grew 28% to $229.4 billion. The rise in FUM helped aggregate affiliate base fees grow 35% to $1 billion.

Pinnacle also reported that net profit after tax (NPAT) grew 31% to $176.7 million and earnings per share (EPS) rose 25% to 78.1 cents.

Management believes that the business should be able to compound EPS at a high rate.

The company highlights that it's purposefully expanding into larger international markets, through a growing global affiliate presence, expanding its globally relevant product suite and increasing global distribution footprint.

I expect the business will be able to generate growth through ongoing performance of existing affiliate strategies, they can launch new strategies and the Pinnacle portfolio can expand with new names.

Pinnacle notes that 81% of affiliate strategies with a track record of five years or longer have outperformed over a five-year period.

Pinnacle share price valuation

The ASX dividend stock is now valued at less than 16x FY27's estimated earnings, according to forecast on Commsec.

The projection on Commsec then suggests the business could grow its EPS by 20% in FY28 and increase it by a further 21% in FY29. In other words, it's suggested that the business could deliver significant earnings compounding over the next few years, which is exactly what could drive the dividend higher.

The predictions suggest the business' dividend could grow by 70% between FY26 to FY29, which would be pleasing to see.

The post 1 ASX dividend stock down 47% I'd buy right now appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in Pinnacle Investment Management Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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