If a high dividend yield is what you’re after, this stock is not for you. But if what you want is a stock that has proven to be consistent and promises the same going forward, you might want to consider Target Corporation (NYSE: TGT).
Source: Andrea Piacquadio
Target is a retail company with apparel, home, hardline, food, beverage and beauty products in its stores. The company has made itself a one-stop-shop for shoppers in need of those essentials, with supply chain facilities to facilitate deliveries. With its same-day retrieval feature, it has continued to attract customers to its goods, albeit digitally.
While a 1.63% dividend yield is not the most attractive yield on the market, a closer look at the company’s dividend story reveals some favorable news. Target pays 21.4% of its income on dividends. The rest is reinvested into growing the company, which is not a bad thing for investors, as they can rest assured that the company pays attention to growing the business.
In return, investor shares can grow in worth as the company stock grows, and dividend yields may even go up with it. After all, Target already has a history of increasing dividend per share for the last 50 years. This low payout ratio also means the company can easily keep up with dividend payments, which is good news for investors who need consistent dividends.
Source: Target
The retail stock had a great quarter in its Q3 FY 2022, recording digital comparable sales growth of 155% and store comparable sales growth of 9.7% year-on-year. Earnings before interest, tax, depreciation, and amortization increased to Even GAAP earnings-per-share went up by 51.6% to $3.04 year-on-year.
Long term, Target is a stock you expect to remain profitable. It has shown good performance, even during the pandemic, when we were all forced indoors. It has since opened new stores and supply chain facilities.
Technical Analysis
Bullish for 53 months until it reached its all-time high of $269, TGT gives investors reasons to invest in it other than its dividends.
Right now, the stock is going through a long-overdue correction, having fallen below the previous low. The stock might find rest on the $199.2 – $205 support level before either rallying for the next bullish run or even dipping further. And if the latter scenario prevails, we may see a further correction to the $165.3 – $170.6 support level.
If a high dividend yield stock is more to your liking, then you’ll want to check this analysis out.
