Target Eyes $3 Dividend By 2017

By the way, the big dividend news today isn’t Apple (AAPL) — it’s Target ($TGT).

Target didn’t increase its dividend today. The next dividend increase will probably be announced in June, and that will be the 41st-straight annual dividend increase.

But Target did say today that it plans to get its dividend to $3 per share by 2017, assuming it reaches its EPS goal of $8 per share.

Let’s look at the numbers: A $3 per share annual dividend is 75 cents per share per quarter. Last year’s dividend increase was from 25 cents to 30 cents per share. For Target to hit 75 cents per share in 2017, that would mean a dividend growth rate of 16.5%.

That’s a bold forecast. Target could certainly hit $3 per share by 2017 but it will be hard to achieve it without raising their payout ratio.

If Target is able to hits its (um) Target, then the shares are a great buy here at $58 per share. For me, I don’t trust forecasts made that far out into the future.

Posted by on March 19th, 2012 at 10:36 am

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.