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I think this FTSE 100 dividend stock’s too cheap for ISA investors to miss!

Over the past three months, Prudential (LSE: PRU) has been one of the biggest fallers on the FTSE 100, its share price collapsing by a whopping 21%.

It was always likely the insurer would be downvalued after its UK and European operations were hived off and listed separately on the blue-chip index as M&G. But this isn’t the sole reason for its share price demise. Concerns over Prudential’s profits prospects in its remaining markets of Asia and the US have worsened.

Yesterday, GDP data from the States showed the North American economy grew just 1.9% in the third quarter, down from 2% in the previous three months, and extending fears of steady decline as we move into 2020. The bickering over tariffs between US and Chinese lawmakers is clearly having an impact on business investment, but the problem is particularly troublesome in Prudential’s Asian markets.

Asian worries

Latest GDP numbers from the regional engine room, China, came in at their lowest rate for almost 30 years in quarter three, at 6%. However, trade wars are not the only thing souring investor demand for ‘The Pru’ in recent weeks, with extreme political unrest in Hong Kong also casting a shadow over profit expectations in the near-term and beyond.

The extent of this problem was illustrated today when data showed the economy there shrank 3.2% in the third quarter, worsening from the 0.4% fall in the previous three-months, and prompting the first recession since the 2008/2009 financial crisis.

It’s not a surprise to see City analysts mark down their earnings forecasts for Prudential in this climate. They’re currently expecting a rare 1% earnings dip in 2019 and it’s clearly quite possible profits will remain under pressure in 2020.

Long-term lovely

Despite these problems though, I would argue that, at current prices, the insurance giant is hugely attractive for long-term investors as it now deals on a bargain-basement forward P/E ratio of 8.5 times.

Don’t be mistaken. Sure, economic turbulence in its key regions is a problem right now. But once this cyclicality runs through the trading landscape for Prudential and its peers, those critical emerging markets remain compelling. Future growth predictions remain strong and, for financial services providers, a mix of rapid population expansion, rising personal incomes, and low product penetration provides plenty of opportunity to grab business.

Dividends to keep rising

And, in the meantime, investors can expect annual payouts at this reliable dividend grower to keep rising. Having a solid long-term outlook and a dedication to handsomely rewarding shareholders is one thing, but Prudential has the financial clout to back it up.

The splitting of M&G means the business is no longer subject to Solvency II rules, but under the Local Capital Summation Method (LCSM) framework in Hong Kong, it recorded a handsome £7.4bn surplus as of June. And this prompted it to lift the interim dividend 5% year-on-year.

For 2019, a total 51.2p per share reward is forecast, up from the 49.35p of last year, a reading which yields a chunky 3.8%. And it’s quite likely Prudential will have the balance sheet strength to keep raising payouts in what could be a troublesome 2020 too.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Prudential. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.