10 Best Dividend Growth Stocks to Buy and Hold in 2025

4. Target Corporation (NYSE:TGT)

5-Year Annual Dividend Growth Rate: 11.30%

Target Corporation (NYSE:TGT) is a Minnesota-based retail corporation that operates a chain of hypermarkets and discount department stores. The company has shown consistent improvement in operating income over the past year and maintains a strong financial position. Despite having relatively high debt, its cash, cash equivalents, and short-term investments easily cover short-term liabilities. The company’s increasing cash reserves and an interest coverage ratio of 11.6 further strengthen its financial stability. Target’s liquidity is supported by a clean balance sheet, free of intangible assets, and a solid return on invested capital (ROIC) of 11.5%. Operationally, its EBITDA margin of 8.4% exceeds the industry average, while its efficient inventory management is reflected in a strong inventory turnover ratio and healthy inventory levels.

In addition, in the first nine months of 2024, Target Corporation (NYSE:TGT) generated $4.07 billion in operating cash flow and ended the quarter with $3.4 billion in cash and cash equivalents. During this time, it returned $516 million to shareholders in the form of dividends. Its quarterly dividend comes in at $1.12 per share for a dividend yield of 3.31%, as of December 29. TGT is one of the best dividend aristocrats on our list as the company holds a 53-year track record of consistent dividend growth. In the past five years, the company has raised its payouts at an annual average rate of 11.3%.

In the third quarter of 2024, Target Corporation (NYSE:TGT) reported revenue of $25.7 billion, marking a modest 1.06% increase from the same period last year. However, this result missed analysts’ expectations by $231.8 million. For the fourth quarter, the company expects comparable sales to stay steady, with projected GAAP and adjusted earnings per share (EPS) between $1.85 and $2.45. For the full year, Target expects GAAP and adjusted EPS to range from $8.30 to $8.90.

With a collective stake value of nearly $1.4 billion, 49 hedge funds tracked by Insider Monkey held positions in Target Corporation (NYSE:TGT) at the end of Q3 2024. With nearly 3 million shares, Diamond Hill Capital was the company’s leading stakeholder in Q3.