1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
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:

GuruFocus has detected 4 Warning Signs with Wal-Mart Stores Inc $WMT.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.

Performances of the stocks mentioned by Dividends4Life

User Generated Screeners

TFCSpinoffs inside buys
jtepper2Cheap CAPE
TFCPEG1 Buyback Inside 2
TFCLike Coke
vvalsecchiGuru Screen New
efredbacdogs and cash
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)

GF Chat