Target Corporation, based in Minneapolis, Minnesota, is the fifth-largest retailer in the United States, behind Wal-Mart, Home Depot, Kroger and Costco. The company, founded in 1902 already, ranks 33e Fortune 500 ranking in 2007. Target currently operates only in the U.S. market, but with the recent acquisition of the majority of Canadian chain Zellers stores, the company plans to expand into Canada by 2014 at the latest. Target generates revenue from sales of clothing, electronics and housewares. Target has carved out a niche as a "cheap chic" retailer.
TGT's current yield is modest at 2.50, significantly higher than its long-term average of 1.52%. average annual dividend growth on the other hand is attractive, with 21.90%. In addition, the company has managed to increase the pocket money of its shareholders during 40 consecutive years, which is remarkable. Despite this dividend growth, the distribution ratio remains very cautious, with only 25.60%.
The title has shown a marked performance since 1995, but this is paid for by a high volatility of 20.20%. The beta of 0.88 confirms that TGT is quite sensitive to market variations.
The value of the security in CHF is sensitive to dollar fluctuations, with a $risk of 0.65. A fall in the greenback is thus usually also accompanied by a fall in the value of the security in CHF, which increases the risk. The upcoming expansion in Canada should correct this negative effect somewhat.
TGT is a dynamic stock, with very good dividend growth and a low payout ratio. However, its high volatility and dependence on the stock and currency markets mean that for the moment we prefer not to take a position on this stock.
Sources: Wikipedia, Wikinvest, Swissquote, dividends.chDiscover more from dividendes
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Hello Jerome,
With the dollar falling and the stock falling, do you think Target is a stock to buy right now?
Pat Jac
Hello Pat Jac, yes the dollar is very low and the stock has fallen, even if it has risen a little recently.
I bought it on February 12th http://www.dividendes.ch/2014/02/achat-de-target-nysetgt/, while the title had been punished by the market
Then the earnings announcement was better than expected in the last quarterly report and the stock rose again.
I think it's a nice opportunity, even if the company still has some dirty laundry to wash (computer security issues).