Friday, May 23, 2014

Recent purchase: Target (TGT)

I bought 50 shares at $56.07 on 05/22/14.
 
Target's market price was low in recent quarters due to data breach and Canadian sales. As a dividend investor, I still have confidence in TGT in the long run. So I took action and bought some shares into my portfolio.

Dividend Analysis



Key points:-

1) From 1983 onwards, Target has been paying dividend quarterly.

2) Dividend has been growing year after year and never fails.  It never has dividend cut or even remain stagnant. It's lowest year-over-year dividend growth rate is 3.58%.

3) Average annual dividend growth is 10%.

4) With its current dividend yield at 3%, annual dividend growth at 10%, it will take around 13 years to reach 10% annual return goal.

From Q1'14 Earnings Call

According the recent quarterly transcript, Target interim CEO expressed below strategy priorities, including dividend.  As a dividend investor, I'd love to hear they will continue support the dividend and build on their record of more than 40 years of annual dividend increases.

Finally, our point of view on capital deployment remains the same. This has always been a Board level discussion and we continue to be aligned with them on the following priorities; invest everything appropriate in our core business on projects that will support Target's growth and generate superior returns; support the dividend and build on our record of more than 40 years of annual dividend increases. And beyond those first two uses, return cash through share repurchase when we have room within our middle A credit ratings. 
Also from their quarterly meeting, they listed out three priorities to boost their sales and regain customers.  I can feel their courage and determination. That's why I have confidence in their long-run prosperity.
As we look ahead to the second quarter and beyond, the Board and our team are aligned on three priorities. 
...The first is growing traffic and sales in our U.S.
...Second, we must improve our Canadian segment performance.

...Finally, we need to accelerate our digital transformation and become a leading Omni-channel retailer. 
Entry Points

My entry point is around $56.  I'll probably buy more when market price goes deeper at around $54.  However, I'll limit my total shares of Target at 100 shares.

Stay tuned.


2 comments:

  1. Great buy! I'm a fan of the company long-term as you probably know.

    ReplyDelete
  2. TGT has definitely been the hot stock as of late and with their crazy dividend hike just announced I'm sure many of the dividend bloggers will want to get in on it. Do you plan on having a page with all of your stock holdings?

    ReplyDelete