GuruFocus Premium Membership

Serving Intelligent Investors Since 2004

Try It 100% FREE for 7 Days!

Articles (956) 

Target Is Putting Pressure on Wal-Mart's Dividend

June 14, 2012 | About:
As the world's largest retailer, Wal-Mart (NYSE:WMT) is not used to being the one bullied. Its new competition is not coming from the retail side, but instead it is coming from the financial side. Specifically, Wal-Mart, who has led the way among major retailers in dividend yield, is starting to get some real competition from Target (NYSE:TGT).

Target Corp. operates about 1,700 Target and 250 SuperTarget general merchandise stores across the U.S. June 13, the company increased its quarterly dividend 20% to $0.36 per share. The dividend is payable Sept. 10, 2012, to shareholders of record at the close of business Aug. 15, 2012. The yield based on the new payout is 2.5%. WMT's current yield is 2.4%.

TGT has notched double-digit dividend growth every year since 2005. In addition, better-than-expected results led the company to raise its full-year earnings guidance last month by $0.05 cents ($4.60 to $4.80 per share.) Although TGT is trading below my fair value price of $70.56, I am not ready to buy due to a higher level of debt than I am comfortable with, but I am certainty watching it much closer than I have in the past.

Full Disclosure: Long WMT. See a list of all my dividend growth holdings here.

Related Articles

- Love People, Use Dividend Stocks

- The 2012 Dividend Achievers

- Why Dividends Matter

- 2011 Was A Great Year For Dividend Stocks

- Utilities Stock Funds Were 2011's Bright Star

About the author:

Visit Dividends4Life at:

Rating: 4.2/5 (5 votes)


Please leave your comment:

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)