Target Corporation (TGT): Among Defensive Dividend Stocks To Buy During Market Sell Off

We recently published a list of 10 Defensive Dividend Stocks To Buy During Market Sell Off. In this article, we are going to take a look at where Target Corporation (NYSE:TGT) stands against other defensive dividend stocks to buy during market sell off.

The importance of defensive dividend stocks only becomes clear when the broader market is taking a hit. The S&P is down nearly 8% in a month while Nasdaq has lost over 11.41%. Investors are wondering how to protect themselves from volatility and the answer lies in defensive stocks.

Here is a key distinction investors must understand. Growth stocks rely on price appreciation to generate shareholder returns, something that is hard to achieve when the broader market is facing a severe sell-off. Dividend stocks, on the other hand, became more attractive. They not only help reduce the volatility but as their price goes down, their yield becomes more attractive.

We therefore decided to identify the best stocks for such a scenario. To come up with the list of 10 defensive dividend stocks to buy during a market sell-off, we only considered stocks belonging to the Consumer Defensive sector with a market cap of at least $2 billion and a dividend yield of at least 3%.

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Target Corporation (NYSE:TGT)

Target Corporation is a general merchandise retailer company in the U.S. The company provides apparel, shoes, jewelry, beauty and personal care, accessories, cleaning, and other products. The stock’s 4.28% dividend yield continues to draw income-oriented investors’ attention.

After a disappointing Q3, the company reported its FY2024 results last month. Though sales were slightly less than the previous year, the company was able to reduce its net debt. This decline in net sales was due to low sales in the clothing, household, and electronics segment in the first half of 2024. Despite weak sales, the company continues to grow its gross margins.

Management expects sales to remain stable in 2025 regardless of a slowdown in consumer spending. Operating margins are expected to improve.

After a 36% decline in a year, the dividend yield is attractive and offers an opportunity for income investors willing to take exposure to the retail business.

Overall, TGT ranks 2nd on our list of defensive dividend stocks to buy during market sell off. While we acknowledge the potential of TGT as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as TGT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.