Should Income Investors Buy Target Corporation (NYSE:TGT) Today And Lock In The 3.30% Dividend Yield?
Over the past 10 years Target Corporation (NYSE:TGT) has grown its dividend payouts from $0.56 to $2.48. With a market cap of US$40.85B, Target pays out 50.40% of its earnings, leading to a 3.30% yield. Let me elaborate on you why the stock stands out for income investors like myself. Check out our latest analysis for Target
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. More specifically: Its annual yield is among the top 25% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It has the ability to keep paying its dividends going forward
High Yield And Dependable
Target’s dividend yield stands at 3.30%, which is high for Multiline Retail stocks. But the real reason Target stands out is because it has a high chance of being able to continue to pay dividend at this level for years to come, something that is quite desirable if you are looking to create a portfolio that generates a steady stream of income.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of TGT it has increased its DPS from $0.56 to $2.48 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes TGT a true dividend rockstar. The company currently pays out 50.40% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 58.55%, leading to a dividend yield of around 3.60%. Furthermore, EPS should increase to $5.11. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
Next Steps:
There aren’t many other stocks out there with the same track record as Target, so I would certainly recommend further examining the stock if its dividend characteristics appeal to you. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three key factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for TGT’s future growth? Take a look at our free research report of analyst consensus for TGT’s outlook.
Valuation: What is TGT worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TGT is currently mispriced by the market.
Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
