Target Corporation (NYSE: TGT) is a part of the elite group of stocks known as Dividend Kings, which are companies that have consistently raised their dividends for at least 50 consecutive years. With only 53 stocks on U.S. markets qualifying as Dividend Kings, Target stands out as a top pick for investors.
Target recently marked its 52nd consecutive year of dividend increases, raising its quarterly dividend to $1.12 per share in the third quarter. This consistent dividend growth showcases the company’s stability and long-term success.
What is a Dividend King?
Dividends are payments made to shareholders out of excess cash generated by a company’s earnings. Companies that offer dividends are typically older and more established, providing value to their shareholders. Target’s status as a Dividend King reflects its ability to generate steady earnings and reward shareholders with consistent dividend increases.
Why Target is a great Dividend King
Dividends provide income regardless of stock price fluctuations, making them valuable during market downturns. Target excels in key factors such as yield and payout ratio. With a yield of 2.94% and a payout ratio of 45%, Target offers a compelling investment opportunity compared to other Dividend Kings.
Solid returns and future growth
Target’s stock performance has been impressive, with a 6% year-to-date return and a 21% return over the past 12 months. When factoring in reinvested dividends, the total one-year return is 25%. Additionally, Target has an annualized return of 9.5% over the past 10 years, aligning with the S&P 500.
Looking ahead, analysts project an 18% increase in Target’s stock price over the next 12 months, further highlighting its growth potential. With strong yields, consistent performance, and future growth prospects, Target emerges as the best Dividend King stock to buy now.
Source: Original Post