Target (TGT) has been in the news for all the wrong reasons in recent years. But unbeknownst to most investors, the discount retailer is a Dividend King.
Claim 30% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Target has raised its dividend for 54 consecutive years. That places the company firmly in the Dividend King camp, which is reserved for companies that increase their dividend for 50 straight years or longer. Today, Target pays its shareholders a quarterly distribution of $1.14 per share, giving the stock a chunky yield of nearly 4%.
Target shareholders have had to content themselves with the strong dividend in recent years as the company’s stock has languished amid declining sales and poor financial results at the company. However, there are signs that a turnaround at Target is taking hold, sending TGT stock up 22% this year.
Target’s Turnaround Strategy
Management at Target is trying to end years of disappointing financial results driven by a series of company missteps and economic factors. Target’s sales have been flat for the past four years. Last October, Target announced it was cutting 1,800 corporate jobs, its first major layoff in a decade.
In March of this year, the Minneapolis, Minnesota-based company announced earnings per share (EPS) of $2.44, which topped the $2.16 expected among analysts. Revenue in the period totaled $30.45 billion, which was below the $30.48 billion forecast on Wall Street. Sales were down 1.5% from a year earlier.
While the turnaround continues, investors can benefit from Target’s healthy dividend payment.
Is TGT Stock a Buy?
Target’s stock has a consensus Moderate Buy rating among 26 Wall Street analysts. That rating is based on 11 Buy, 13 Hold, and two Sell recommendations issued in the last three months. The average TGT price target of $127.26 implies 4% upside from current levels.
