57-year-old Dividend King makes $5 billion move to protect payout

Target Corporation has softly go 1 of retail's most reliable dividend stocks, delivering 57 consecutive years of payout increases.

That streak present faces its toughest trial yet arsenic Target (TGT) navigates what COO Michael Fiddelke called a "period of transformation" marked by softening income and mounting unit connected margins.

The retailer's answer? A $5 cardinal superior push successful 2026, astir $1 cardinal much than 2025,  aimed squarely astatine protecting the dividend portion repositioning the concern for growth.

"We're not waiting for conditions to improve. We are driving the alteration ourselves close now," Fiddelke said during Target's third-quarter net call.

The comments came conscionable weeks aft the institution eliminated 1,800 office roles, an 8% chopped designed to portion retired layers and velocity up decision-making.

Fiddelke is Target’s incoming CEO and aims to stabilize its payout not by cutting costs, but by investing heavy successful the infrastructure needed to vie successful modern retail.

While broader markets hover adjacent all-time highs, Target has importantly underperformed successful caller years.

In the past 5 years, Target banal has fallen by 40%. Notably, the drawdown has raised its 2026 dividend output to 4%

Target’s adjusted net per stock has narrowed from $13.56 per stock successful fiscal 2022 to (ended successful January) to $8.86 per stock successful 2025. Analysts forecast net to autumn to $7.30 successful fiscal 2026.

Target is projected to extremity fiscal 2026 with free currency travel of $2.47 billion, down from $4.48 cardinal successful 2025.

Given an annual dividend expense of $2.06 billion, Target’s dividend payout ratio is astir 83.4%, which is rather high.

Analysts expect escaped currency travel to autumn to $1.8 cardinal successful fiscal 2027, pushing its payout ratio supra 100%.

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The retail elephantine volition beryllium forced to money its dividend from its currency balance, which stands astatine $3.8 billion.

• Dividend Yield: 4%

• Payout Ratio: 83.4%

• Quarterly Dividend: $1.14 per share

• Annual Dividend: $4.56 per share

• Consecutive Years of Increases: 57 (Dividend King status)

• 5-Year Dividend Growth Rate: Approximately 11% annually

It's evident that Target volition person to amended nett margins astatine an accelerated gait to proceed its awesome dividend maturation streak.

The backbone of Target's program is simply a implicit rethinking of however its stores operate.