1 ASX dividend stock down 34% I'd buy right now

I love buying ASX dividend stocks after they've fallen because we're getting much better bang for our buck.

Not only do we get to buy a business at a lower price-earnings (P/E) ratio, but it also means the dividend yield is larger.

For example, if a business has a dividend yield of 4% and then the share price drops 10%, the yield becomes 4.4%. With the ASX dividend stock Propel Funeral Partners Ltd (ASX: PFP), we're talking about a much larger fall.

As the chart below shows, the Propel share price has fallen by around 34% since the start of 2026. I think this is a good time to invest in the funeral provider because of a few different reasons.

Opportunistic time to buy

One of the most important things about investing is that the price we pay has a big impact on the size of the returns generated.

There are a number of headwinds facing the Propel share price right now, which is why it's so much cheaper. Higher interest rates may have prompted investors to consider other safe assets, such as cash, term deposits, and interest rate-linked bonds, hurting the Propel share price – this effect could reverse if/when interest rates start to come down again, possibly next year.

Plus, the ASX dividend stock is expecting FY26 revenue growth to be between flat to 1.9%. This seems like a relatively low level of revenue growth for the year, and I'm expecting more in future financial years, so this could be an opportunistic time to buy as the ageing demographic tailwinds become stronger.

Long-term growth trend

According to Propel, the industry is expected to see volume growth in the coming years.

The number of deaths in Australia is expected to increase by an average of 2.9% per year between 2026 and 2035 and then 2.4% per year between 2036 and 2045. That compares to a growth rate of 1.1% between 1990 and 2025.

As the saying goes, there are only two things certain in life – death and taxes – and we can't invest in the Australian Taxation Office.

There is a certain number of deaths each year, which means the business has a certain level of earnings each year, making it very defensive.

According to the forecast on CMC Invest, the business is now valued at 22 times FY26's estimated earnings. I think this looks reasonable for the long-term growth potential.

Good dividend yield

The ASX dividend stock is delivering a solid level of dividends for investors, which could grow in the coming years.

Based on the forecast on CMC Invest, the potential grossed-up dividend yield for FY26 is 5.5% (including franking credits), and this yield could grow to 6.2% by FY28 (including franking credits).

That's not the biggest yield on the ASX, but it is a good level of payouts, and it could deliver payout growth in the years ahead.

The post 1 ASX dividend stock down 34% I'd buy right now appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in Propel Funeral Partners. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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