1. Target Corporation (NYSE:TGT)
Analyst Upside Potential as of August 7: 29.7%
An American retail corporation, Target Corporation (NYSE:TGT) tops our list of the best dividend aristocrat stocks. The company has consistently experimented with its business operations but has struggled to return to the pandemic levels due to supply chain disruptions, inflation, and reduced consumer spending on non-essential goods. In the first quarter of 2024, the company reported revenue of $24.5 billion, marking a 3.12% decline from the same period the previous year. Comparable sales also fell by 3.7% compared to the prior year, although they met expectations. Despite these challenges, the company is proactively addressing them by aligning with customer demands. With the rise in online shopping, the company has recently partnered with Shopify, a global e-commerce platform, to feature a range of popular merchants and products on Target Plus. This collaboration is designed to enhance the company’s third-party digital marketplace by offering a curated selection of products to customers.
Target Corporation (NYSE:TGT) fared well during the 2020 pandemic due to its timely transition to digital channels. The stock price surged by over 100% from March 2020 to March 2021. Moreover, the company’s revenue demonstrated an upward trend from 2020 to 2022 but experienced a decline in 2023. Since the start of this year, the stock is down by over 6%.
On June 12, Target Corporation (NYSE:TGT) declared a quarterly dividend of $1.12 per share, having raised it by 2%. Through this increase, the company stretched its dividend growth streak to 53 years. The company has also remained committed to its shareholder obligation, returning $508 million to investors through dividends in the first quarter of 2024. With a dividend yield of 3.34% as of August 7, TGT is one of the best dividend aristocrat stocks on our list.
Target Corporation (NYSE:TGT) was a popular buy among elite money managers at the end of Q1 2024 as hedge fund positions in the company jumped to 67, from 58 in the preceding quarter, according to Insider Monkey’s database. The stakes owned by these hedge funds are collectively worth over $2.26 billion. With roughly 3 million shares, Diamond Hill Capital was the company’s leading stakeholder in Q1.
While we acknowledge the potential of TGT as an investment, our conviction lies in the belief that some deeply undervalued dividend stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued dividend stock that is more promising than TGT but that trades at less than 7 times its earnings and yields nearly 10%, check out our report about the dirt cheap dividend stock.
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Disclosure: None. This article is originally published at Insider Monkey.
