Retail chain Target (NYSE:TGT) is up 0.35% in trading this morning, all likely thanks to one recent development. The company increased its quarterly dividend, a move that's likely to draw the attention of income investors across all markets. Target's increased dividend likely only adds to the interest in the financial analyst segment as well, which has had little but good to say about the company for the last two years.
Target's Quarterly Dividend Hike Part of a Growing Tradition
The recently-released hike calls for the Target stock dividend to be raised from its current $0.68 per share to the new $0.90 per share, an increase of 32.4%. The dividend is to be paid September 10, for shareholders of record as of August 18.
This represents the 216th consecutive quarterly dividend payment made since the company was established back in October of 1967, and if all continues going as it is, this will be the 50th year running that Target has increased its annual dividend as well.
Target's executive vice president and chief financial officer, Michael Fiddelke, noted that the dividend increase is the result of several factors. While the company aggressively reinvests in the business itself, Fiddelke noted—particularly on projects that “...meet our strategic and financial criteria”—Target looks to build its dividend payments immediately thereafter. Fiddelke pointed out that the company has a record of increasing its annual dividend, and looks to maintain that streak as much as possible.
With an excellent recent history of income generation and operating performance, Fiddelke concluded, Target is in an excellent position to not only increase its dividend, but increase it substantially. The recent performance of Target certainly supports such a stance; the company is widely considered a darling of the pandemic, keeping its stores open on “essential retailer” status and also moving to consider tactics like small-footprint retail and improvements in online shopping.
What Are Financial Analysts Saying About Target Stock?
Our latest research of financial analyst opinion reveals that analysts are still extremely bullish on Target stock. While sentiment has slipped somewhat from the highs seen during the pandemic, a re-opening economy has hurt Target minimally overall. The consensus rating on Target is “buy”, and this has been the case for over two years.
A year ago, Target had two “strong buy” ratings, along with 20 “buy” and three “hold” ratings. Six months ago, it was much the same, except now Target added a fourth “hold” rating. Today, meanwhile, a lot of that buying interest has left, leaving us with just one “strong buy”, 15 “buy” and four “hold”. While buying interest still clearly outmatches holding interest—and there hasn't been a “sell” rating seen in over a year and a half—buying interest does seem to be receding somewhat.
The Target price target, meanwhile, occupies a fairly narrow range. The current consensus price target for Target stock is $234.08, with a high of $265 and a low of $188. With Target shares currently selling at $236.33, there is a slim downside potential to the stock right now. That high of $265 is also a recent development.
June so far has been quiet for new developments, but that's coming off a May that was full of new developments. So far this month, there has been one change, as yesterday, UBS Group upgraded from “neutral” to “buy”, and increased the price target from $210 to $265 per share. May, however, was huge for Target; out of the 10 analysts that offered commentary on Target, nine increased their price targets. The 10th analyst, Evercore ISI, merely reiterated its “hold” rating on Target.
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