Target stock (NYSE:TGT) declared profit declines long before the term “earnings recession” entered the financial news discussion.
Target verified what many investors suspected when the business released its earnings report in May. Earnings were suffering as the corporation dealt with the consequences of inflation.
However, investors are attempting to determine if Target is a smart company to own during the current market slump.
Market Evaluation of Target Stock?
Target does sit in a sweet spot in that it provides customers with a combination of essential and discretionary purchases. This explains why the retailer’s income continues to expand year after year.
Simply said, even if customers avoid some of the store’s more frivolous goods, they will still have a reason to purchase at Target. And, since Target pioneered the omnichannel retail concept, the firm is ideally positioned to satisfy customers wherever their buying habits take them.
We’ll have another Federal Reserve meeting and at least one, if not two, CPI readings by the time Target releases its next earnings report. This information will assist outline what the Christmas season and subsequent quarters may look like for TGT stock (NYSE:TGT).
The King will live forever.
Sorry, I couldn’t help myself. However, it points to one reason investors should stay on to their TGT stock (NYSE:TGT). Target has finally entered the ranks of the Dividend Kings. These are firms that have raised their interest rates for at least 50 years in a row.
The dividend yield of 2.65% may not seem to be very spectacular. However, as dividend investors recognize, payment is the most crucial factor. Target presently pays $4.32 per share on an annualized basis.
With a payout ratio of roughly 40%, investors can expect dividend growth to be less than the 7.3% average over the previous three years. On the other hand, Target has some goodwill built in with a payment of more than $4 per share.
That’s why Target stock (NYSE:TGT) is a solid long-term investment, but whether the dividend is enough to pique your interest in the near term is up to you.