Target (TGT) Raises Dividend To Boost Shareholder Value
Zacks Investment Research | Jun 14, 2017 09:55PM ET
Target Corp. (NYSE:TGT) recently declared a 3.3% hike in its quarterly dividend. This Minneapolis, MN-based company raised quarterly dividend to 62 cents a share (or $2.48 annually) from the prior payout of 60 cents (or $2.40 annually). The increased dividend will be paid on Sep 10 to stockholders on record as of Aug 16, 2017.
The dividend yield, based on the new payout and the last closing market price, is approximately 4.3%. In Jun 2016, Target increased quarterly dividend by 7.1% to 60 cents (or $2.40 annually) from 56 cents a share (or $2.24 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 been actively managing capital and returning much of its free cash through share repurchases and dividends. During the first quarter of fiscal 2017, Target repurchased shares worth $305 million and paid dividends of $332 million. The company invested about $500 million of capital in the quarter under review. Management plans to invest between $2–$2.5 billion of capital in fiscal 2017 and more than $7 billion in the next three years.
The shares of this Zacks Rank #2 (Buy) company has increased 6.1% in the past one month driven by better-than-expected performance in the first quarter of fiscal 2017 and strategic initiatives. On the other hand, the Zacks categorized Zacks Investment Research
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