When it comes to investing, everyone loves to see their portfolios grow. For income investors, the focus is on generating consistent cash flow from their liquid investments. Dividends are a key component for income investors, as they provide a regular distribution of a company’s earnings to shareholders.
One company that income investors may want to keep an eye on is Target (TGT). Based in Minneapolis, Target is in the Retail-Wholesale sector and has seen a price change of 7.32% so far this year. The retailer currently pays out a dividend of $1.1 per share, with a dividend yield of 2.88%, which is higher than the industry average.
Target has a history of increasing its dividend, with an average annual increase of 15.40% over the last 5 years. The company’s current payout ratio is 49%, meaning it pays out 49% of its earnings per share as dividends. Target is also expecting earnings growth this fiscal year, with a projected year-over-year growth rate of 4.14%.
Dividends are a popular choice for investors as they can improve stock investing profits, reduce portfolio risk, and offer tax advantages. While not all companies provide a quarterly payout, established firms like Target are considered strong dividend options. It is important to note that high-yielding stocks may struggle during periods of rising interest rates.
Overall, Target presents a compelling investment opportunity for income investors. It offers a strong dividend yield and currently holds a Zacks Rank of 3 (Hold). Investors looking for solid income potential may want to consider adding Target to their portfolio.