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Target: The Only Retail Dividend King Is Rebounding But Competition Is Intense

Published Wed, 07 Aug 2019 10:19:49 -0400 on Seeking Alpha

Investment Thesis For Target
In my recent article quantitatively screening the Dividend Kings, based on my criteria I identified four stocks that are currently potentially interesting for Dividend Growth Investors. One of these was Target Corporation (TGT). The company is a relative newcomer as a Dividend King, having paid a growing dividend for 51 straight years. Importantly, it is the only general retailer that is a Dividend King. Even Walmart (WMT) has only paid a growing dividend for 46 years.
Target has a dividend yield over 3%, a P/E ratio (fwd) of 13.7, which is below the broader market average, a fairly conservative balance sheet, and a long history of growing dividends. Target has faced some recent difficulties. In 2017 the stock price was trading in the low $50s and the dividend yield was over 4%. The company’s top line and bottom lines are now rebounding as has the stock price. But having said that, Target is in a very competitive environment. I think that at the moment the company is making the right moves for opening new markets and for e-commerce, but margins are declining. I think that Target could be a suitable addition to some Dividend Growth Investor portfolios at the right price. However, the stock is fairly valued and there are better choices for investing in Dividend Kings at the moment.

Source: target.com
Overview of Target Corporation
Target is a leading general retailer in the U.S. The company operated 1,851 stores at end of Q1... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
WAL-MART STORES 116.92   26.3 4.44 2.12 1.83
COSTCO WHOLESALE 289.89   35.6 8.15 2.60 0.88
DOLLAR GENERAL 157.10   25.2 6.23 1.28 0.81
AMAZON.COM 1843.55   76.5 24.10 0.00 0.00


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