The U.S. stock market has struggled this year, with the S&P 500 Index ($SPX) down nearly 5% year-to-date. As fears grow that President Donald Trump’s tariff-induced trade war will lead to a recession, investors are flocking to safe-haven assets. Dividend stocks are one example of a safe investment. Dividend Kings, in particular, have a history of not only paying, but increasing dividends for 50 years in a row. Earning this title also reflects the stability of their business, without which these companies would be unable to pay consistent dividends.
Target (TGT), a consumer giant, is one such Dividend King who could provide some stability during these turbulent times. Target is a well-known American retailer that sells a wide variety of items such as clothing, home goods, electronics, and groceries. Target has earned this title by increasing its dividend for the previous 53 years in a row.
Valued at $51.7 billion, TGT stock is down 19% so far this year, presenting an opportunity to buy it on the dip.
Target Has an Exceptional Dividend Track Record
With roots dating back to 1902, Target is a retailer that operates a chain of roughly 2,000 big-box stores across the U.S.
For the full 2024, Target reported total revenues of $106.6 billion, a slight decrease from the previous year’s $107.41 billion. Adjusted earnings came in at $8.86 per share, marking a 0.9% decline year-over-year. Comparable sales growth was a modest 0.1%, with positive trends in categories such as beauty, food and beverage, apparel, and essentials. Traffic increased by 1.4% across both stores and online channels, indicating consistent customer engagement.
Despite recent challenges, Target has continued to reward shareholders with consistent dividends. Following the earnings report, Target declared a quarterly dividend of $1.12 per common share. This dividend is scheduled to be paid on June 1, 2025, to shareholders of record as of May 14, 2025. Last year, Target increased its quarterly dividend by 1.8% to $1.12 per share, marking the 53rd consecutive year of dividend increases. Furthermore, it has an attractive forward dividend yield of 4.1%, compared to the consumer staples average of 1.9%. Target’s low forward payout ratio of 45% is also sustainable, with room for further growth.
Target expressed concerns that tariffs on imports from China, Canada, and Mexico would put profits under pressure, particularly on produce prices. CEO Brian Cornell acknowledged that customers may see price increases on certain Target products as a result. Target collaborates closely with Chinese suppliers to source a diverse range of products, particularly apparel, home goods, and electronics. In the Q4 earnings call, management emphasized that the company has reduced its reliance on China from 60% in 2017 to 30% currently, with plans to reduce it even further to less than 25% by the end of 2026. Target is achieving this by expanding its relationships with manufacturers in other regions. Management also stated that declining consumer spending impacted sales in February and that sales could remain flat for the remainder of the calendar year due to economic uncertainty. For fiscal 2025, total revenue could increase by 1%, in line with analysts’ estimates.
Despite the economic uncertainty, Target isn’t shying away from making expansion plans. During the Q4 earnings call, CEO Brian Cornell outlined the company’s strategic vision for the next five years, which includes attaining revenue of $15 billion. To achieve this, the company intends to invest $4 billion to $5 billion in stores, supply chain, and technology by 2025. This includes the opening of 20 new stores, extensive remodels, and improvements to the store-as-hub model, which ensures faster and more efficient inventory management. The company also intends to modernize its digital experience with the use of artificial intelligence (AI). The consumer giant intends to streamline supply chain operations to improve delivery speed and ensure that products are consistently available to meet demand. Cornell reaffirmed Target’s commitment to the “Expect More. Pay Less.” promise.
Is TGT Stock a Buy, Hold or Sell on Wall Street?
Overall, Target stock is a “Moderate Buy” on Wall Street. Of the 33 analysts covering the stock, 14 analysts rate it a “Strong Buy,” with two rating it a “Moderate Buy,” 16 rating it a “Hold,” and one says it is a “Strong Sell.”
The average target price of $139.27 implies upside potential of 26% from current levels. Plus, its high target price of $188 suggests the stock can rally as much as 71% over the next 12 months.
Analysts who cover TGT stock predict modest earnings growth of 3.2% in fiscal 2025, followed by a 7.6% increase in fiscal 2026.
Trading at 12 times adjusted forward earnings, TGT remains an appealing income stock to safeguard your portfolio during turbulent times.
