Posts Tagged ‘tgt’
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Target Raises Dividend By 20%
Eddy Elfenbein, June 13th, 2012 at 5:37 pmThe other day I mentioned that I expected Target ($TGT) to soon raise its dividend for the 45th year in a row. The company made the announcement today. Target is raising its quarterly dividend by 20%, going from 30 cents to 36 cents per share.
At today’s closing price, the annual dividend of $1.44 per share works out to 2.48%. If you bought shares of Target 30 years ago, you’re now yielding almost 100% a year on your initial investment.
Right now, Target is a good stock but not a great value. I’m highlighting it to show you how well stocks can perform over the long haul.
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Some Retail Stocks Are Heating Up
Eddy Elfenbein, June 11th, 2012 at 2:50 pmEven though the stock market hasn’t been doing well lately, a number of retail stocks have bucked the trend. Target ($TGT), for example, just hit a new 52-week high today, and it’s not far from an all-time high. I expect Tar-Zhay to announce its 45th-straight dividend increase any day now. Last month, the company said it’s aiming to have its dividend at $3 per share by 2017. That’s pretty optimistic, but I like to see folks who have big plans.
Walmart ($WMT) has also been doing well. On Friday, the Behemoth of Bentonville broke $68 per share for the first time since January 2000.
Ross Stores ($ROST) hit a new all-time high today. The stock has practically been in a nonstop bull market for 18 years. In January 1994, shares of ROST were going for 74 cents. Now they’re at $64. That’s an annualized gain of over 27% a year, and it doesn’t include the dividend.
On our Buy List, Bed Bath & Beyond ($BBBY) has pulled back from its all-time high of $74.67 (reached on May 29th). The company had an outstanding earnings report in early April. They beat Wall Street’s consensus by 15 cents per share. What’s interesting, though, is that the stock market took a while to react. After a small bump up after the earnings report, it was almost all gone three weeks later. Then the stock started to rally.
BBBY will report earnings again on June 20th. The company sees fiscal Q1 earnings ranging between 79 cents and 83 cents per share.
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Target Eyes $3 Dividend By 2017
Eddy Elfenbein, March 19th, 2012 at 10:36 amBy the way, the big dividend news today isn’t Apple (AAPL) — it’s Target ($TGT).
Target didn’t increase its dividend today. The next dividend increase will probably be announced in June, and that will be the 41st-straight annual dividend increase.
But Target did say today that it plans to get its dividend to $3 per share by 2017, assuming it reaches its EPS goal of $8 per share.
Let’s look at the numbers: A $3 per share annual dividend is 75 cents per share per quarter. Last year’s dividend increase was from 25 cents to 30 cents per share. For Target to hit 75 cents per share in 2017, that would mean a dividend growth rate of 16.5%.
That’s a bold forecast. Target could certainly hit $3 per share by 2017 but it will be hard to achieve it without raising their payout ratio.
If Target is able to hits its (um) Target, then the shares are a great buy here at $58 per share. For me, I don’t trust forecasts made that far out into the future.
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Target’s Earnings Were Good — And Possibly Bad
Eddy Elfenbein, February 23rd, 2012 at 8:54 amFrom this morning:
The AP:
Target’s 4Q profit declines 5.2 percent
Reuters:
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Target Vs. TJX Companies
Eddy Elfenbein, May 24th, 2011 at 2:34 pmI really don’t have anything profound to say with this post but I was struck by the large divergence between Target ($TGT) and TJX Companies ($TJX).
Normally, companies in the same industry tend to track each with some minor variation — and these companies did until about three years ago. Since then, TJX has raced ahead of Target, and the gap has grown even larger this year.
Target still has a larger market cap than TJX does ($34 billion to $21 billion). TJX’s stock dropped earlier this month after missing earnings by two cents per share. That broke an impressive streak of meeting or beating. Meanwhile, Target had a good earnings report last week although it hasn’t experienced the profit growth recently that TJX has.
TJX now has a distinct valuation premium over Target. Target currently goes for 11.74 times Wall Street’s consensus for this year’s earnings, and 10.88 times next year’s. TJX goes for 13.69 times this year’s estimate and 12.24 times next year’s.
This is a good example of the lesson I’ve told investors many times — don’t concentrate so much on what a company does. Instead, focus on how well they do it. I can’t tell you how many times investors ask me about some stock that’s supposed to be the next “fill in the blank.”
TJX isn’t the next anything, but they executed their business very well and the stock has been handsomely rewarded.
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