Tuesday, November 12, 2013

Latest Buy: TGT

As I mentioned in my latest dividend update, I had some capital to work with. So I decided to initiate a new position today in a big retailer, Target Corporation.

Today's buy:
  • 23 shares of Target Corporation (TGT) @ $65.50
This purchase will add $39.56 to my annual dividend income.

Target Corporation is a retailer, it sells health beauty and household essentials, electronics, food and pet supplies and furniture. This dividend champion has increased dividend payments for 46 years in a row. In 2012 it generated $72 billion dollar in sales and $4.52 in EPS. Target is focusing on their "Long-Range plan": generating $100 billion in sales and $8.00 in EPS in 2017. 

They hope achieving that goal by focusing on expanding same store sales and renovating existing stores, rather than opening a bunch of new stores. Future growth can be realized by increased penetration of the red card. This decreases expenses related for transactions processing other credit cards. Target is targeting middle and upper class consumers. These groups are more focused on quality and diversity of products. That's how Target differentiate itself from Wal-Mart. The company is on track to open 125 stores in Canada this year.

The stock trades for 15-16x earnings which I think is a fair deal. I mean the company raised dividends for 46 years, that means it's a great business and management is doing something right. I'm happy with owning shares and won't mind adding more if the stock drops significantly.

Thanks for reading.


  1. I need to add TGT to my protfiolo also. You'r right that it is very much fair value right now.

    1. FFdividend,

      It's one of the few stocks out there that seems fairly valued. Somehow it pulled back from the July high's, I'm not sure why that happened, but I sure love it.

      Take care.