10 Best Dividend Growth Stocks to Buy and Hold Now

5. Target Corporation (NYSE:TGT)

5-Year Annual Dividend Growth Rate: 11.44%

Target Corporation (NYSE:TGT) is a retail corporation that operates a chain of discounted department stores and hypermarkets. The company has been a strong dividend payer mainly due to its stable cash flow generation. It has a trailing twelve-month free cash flow of $3.1 billion and an operating cash flow of $8.4 billion. Moreover, the company’s low payout ratio of 49% contributes a lot to its dividend increases and shareholder returns. In the first quarter of 2024, it returned $508 million to shareholders in dividends, compared with $497 million in the same period last year. On June 12, the company declared a 2% hike in its quarterly dividend to $1.12 per share. Through this increase, the company stretched its dividend growth streak to 53 years, which makes TGT one of the best dividend aristocrat stocks on our list. Its 5-year average annual dividend growth rate stands at 11.44%. As of July 2, the stock has a dividend yield of 3.08%, much higher than Walmart’s dividend yield of 1.38%.

Target Corporation (NYSE:TGT) has consistently prioritized innovative shopping experiences for its customers. In addition, the company is expanding its focus on expanding its e-commerce presence through marketplace initiatives. Recently, the company unveiled a collaboration with Shopify, a global commerce platform, to feature a range of popular merchants and their products on Target Plus. This partnership enhances the company’s third-party digital marketplace, providing customers with a carefully curated selection of goods. TGT has surged by nearly 8% over the past 12 months.

Target Corporation (NYSE:TGT) reported mixed results in the first quarter of 2024. The company sales and margin saw significant growth during the pandemic due to customer’s inclination toward online shopping. Since then, the company has been struggling to reach that level due to supply chain disruptions, inflation, and reduced consumer spending on non-essential items. In the first quarter of 2024, the company reported revenue of $24.5 billion, which fell by 3.12% from the same period last year. Its comparable sales, though in line with expectations, also fell by 3.7% compared to the prior-year period.

At the end of March 2024, 67 hedge funds tracked by Insider Monkey held stakes in Target Corporation (NYSE:TGT), growing significantly from 58 in the previous quarter. These stakes are collectively valued at more than $2.26 billion. Among these hedge funds, Diamond Hill Capital was the company’s leading stakeholder in Q1.