Target Corp. (NYSE/TGT) announced an increase to its dividend and share buyback program, a sign that the struggling retailer may finally be turning around. (Source: Target, June 9, 2015.)
Target’s board of directors has declared a quarterly dividend of 56 cents per common share, a 7.7 % increase from the prior quarterly dividend of 52 cents. The company also announced that it is doubling its share buyback program to $10.0 billion from $5.0 billion.
Investors cheered upon hearing the announcement. Following the news, Target shares were trading one percent higher at $79.89 in pre-market trading on the morning of Wednesday, June 10. Dividend increases are one way for corporations to communicate their financial well-being to their shareholders.
The third-quarter dividend will be the company’s 192nd consecutive dividend paid since October 1967, when the company became publicly held. With the increase announced today, 2015 is expected to be the 44th consecutive year in which Target has increased its annual dividend.
Target Corp. was incorporated in Minnesota in 1902. Target offers their customers everyday essentials comprised of fashionable, differentiated merchandise at discounted prices. Prior to January 15, 2015, Target operated a Canadian segment. On January 15, 2015, Target announced their exit from the Canadian market and Target Canada Co. However, all of their revenues from continuing operations are generated within the United States. Target’s market cap is about $50.38 billion. (Source: Target, last accessed June 10, 2015.)
According to Target’s 2014 annual report, total revenues increased by 1.9% to $72.6 billion in 2014 from $71.2 billion in 2013. Net earnings dropped by 9.1% to $2.4 billion in 2014 from $2.6 billion in 2013.
Target serves guests (what they refer to their customers as) at 1,795 stores and Target.com. Since 1946, the company has given five percent of its profit to communities that would count for more than $4.0 million a week.
Target’s major competitors are Amazon.com, Inc. (NASDAQ/AMZN); Wal-Mart Stores, Inc. (NYSE/WMT); and Sears Holdings Corporation (NASDAQ/SHLD).