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Target (TGT) Rewards Investors with 7.1% Hike in Dividend

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Target Corp. (TGT - Free Report) recently declared a 7.1% hike in its quarterly dividend. This Minneapolis, MN-based company raised its quarterly dividend to 60 cents a share (or $2.40 annually) from the prior payout of 56 cents (or $2.24 annually). The increased dividend will be paid on Sep 10 to stockholders on record as of Aug 17, 2016.

The dividend yield, based on the new payout and the last closing market price, is approximately 3.5%. In May 2015, Target increased its quarterly dividend by 7.7% to 56 cents (or $2.24 annually) from 52 cents a share (or $2.08 annually).

Target is an attractive option for both growth and income seeking investors. An income generating and dividend paying stock is always a preferred investment option. People looking for regular income from stocks are most likely to be inclined toward companies that have a track record of consistent and incremental dividend payments.

Dividend hikes not only enhance shareholder returns, but also raise the market value of the stock. In fact, companies often tend to attract new investors and retain the old ones through this strategy

Target has undertaken several strategic initiatives to boost its performance. The company intends to deploy resources to significantly develop its online platform as well as store facilities to make shopping more convenient for customers. Moreover, with customers shifting rapidly to online, it was becoming increasingly important for Target to develop sturdy omni-channel facilities to remain in the business. Target also launched an international version of its website thus reaching over 200 countries and territories. Secondly, the company plans to expand its merchandise assortments with special emphasis on categories like Style, Baby, Kids, and Wellness that are performing well.

Target currently has a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks worth considering in the retail space include Burlington Stores, Inc. (BURL - Free Report) , Fred's, Inc. and Destination XL Group, Inc. (DXLG - Free Report) . All these stock hold a Zacks Rank #2 (Buy).

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