Target Corporation (NYSE: TGT), the second-largest discount retailer based in Minneapolis, Minnesota, today announced a 7.1% raise in its quarterly dividend from 56 cents to 60 cents per share. The new dividend payable is September 10, 2016 to shareholders of record at the close of business August 17, 2016.
The third quarter dividend will be the company’s 196th consecutive dividend paid since October 1967 when the company became publicly held. This year is also expected to be the 45th consecutive year in which Target has increased its annual dividend. It also continues a trend of 4-cent dividend boosts in recent years, increasing at least 19% YOY from 2010 to 2014. After raising the dividend by 7.1%, the yield on Target stock will achieve at 3.52%, topping more than 95% of the companies listed on S&P 500.
Like other companies in retail industry, Target has experienced a weak start this year, struggling to attract customers and make profits. Last month, Target said customers pulled back on spending in the quarter ended April 30 and warned that sales at existing stores may decline in the current quarter. Meanwhile, Target`s stock has fallen 6% so far this year and 14% in the past 12 months. However, most analysts rate the stock as a "buy" since Target has notable strengths, including its great return on equity, growth in earnings per share and largely solid financial position with reasonable debt levels. Besides, Target has been investing to build up its digital business as consumers have been increasing purchases made online. The stock is currently trading at about $68.7 and lots of rating firms seem to have a target price over $77.