Dividend growth stocks can be valuable investments to hold in your portfolio. Not only do they pay dividends, but those payouts are likely to rise over time, as long as the business is still growing and its operations are profitable.
One excellent dividend stock to buy and hold is Target (NYSE:TGT). The big-box retailer may not be as popular these days as its rival Walmart (NYSE:WMT) since it is more dependent on discretionary purchases as opposed to groceries, but it’s still a good income stock nonetheless.
Last year, the company announced a dividend increase on June 15. And another rate increase could be announced as soon as this week. The last increase was a 1.9% bump up to the payout. And Target has been increasing its annual dividend for an impressive 52 consecutive years.
Today, investors are collecting a 3% yield from the stock, which is well above the S&P 500 average of around 1.4%. To generate $1,000 in annual dividends from Target’s stock, you would need to invest approximately $33,300. Its payout ratio is around 50% which means there’s still plenty of room for the company to pay a higher dividend.
Whether you want a good dividend or just a solid investment to hang on to for the long term, Target can be a solid stock to add to your portfolio. At only 16 times earnings, it’s a fairly cheap stock to own. Year to date, it’s up around just 2% but in the long run the stock could have much more room to rise in value.
