Recent Buy: May 6th 2014

target-2013

I added my 13th company today in the Target Corporation. This Dividend Champion with 46 years of dividend raises also boasts a 10 year dividend growth rate of 21%.  I purchased 24 shares at $57.95 a share and a PE of 18.7.  The yield is 2.97% and this adds $41.28 to my 12-month forward dividends for a new total of $651.82.

With the departure of its CEO, Target’s price has dipped in the past few days. Problems include the data breach, competition in online retail, and a poorly executed expansion into Canada. Has it all come together to dramatically effect earnings? We’ll find out much more later this month.

However, I’m not as worried about the short term. I plan to hold this fundamentally solid company for many years to come. I see these as issues that need immediate attention, but behind them is a shareholder friendly board that isn’t just twiddling its thumbs. They are taking action and seeking new leadership to fix the problems.

I do question how bad things really are, and what their effect on the stock price will be, but on further dips I will add to my position. Ultimately, I think the investor with a longer time horizon could benefit from the current setback.

What are your thoughts on TGT?

My Dividend Growth

http://www.mydividendgrowth.com

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6 thoughts on “Recent Buy: May 6th 2014
  1. Mr. SFZ

    I like TGT at these levels. I think the retail data breach has been overblown and the stock’s been unfairly beat up because of it. With a long-term horizon I plan on continuing to dollar cost average into a position with this company. Although I think the dividend growth or buyback will be slowed in the short-term, in the long run should still make for a solid investment.

     
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    1. My Dividend Growth

      Mr. SFZ,

      It’s great that you’re using loyal3 on this one, save on those transaction costs! I’m feeling pretty nervous about this investment and I’m wondering if I should have waiting for earnings to stabilize even lower due to the failed expansion in Canada. There are probably better opportunities I could have taken with more predictable future growth, but I do like this company and I’ll be riding it out. Luckily this will be a small position by the end of the year 🙂

      Thanks for stopping by!
      Ryan

       
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      1. Mr. SFZ

        Yeah, I’m kind of feeling the same way, especially since I have no idea what retail is going to look like 15-20 years down the road. But with the share price dropping so much I figured I’d take a chance. I’d like to see Target try to expand their online business like Wal-Mart has been doing to set them up better for the future.

        I’ll probably continue to add over the next few months and then turn my attention to other stocks. While not a core position like I want stocks like KO, JNJ, XOM, etc. to be in my portfolio, it should make for a solid, “2nd tier” type dividend growth investment.

         
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        1. My Dividend Growth

          Great way to look at it and as long as Target doesn’t stop it’s 41 years of dividend increases, hopefully it’s worth taking a chance on. I hear you about online retail, I want them to get a CEO with a tech background and ideas to bring Target into the future.

          I want all those core positions as well! JNJ is one I thought might have been better than TGT at current valuations. I will own them eventually 🙂

           
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  2. DGJourney

    I also purchased TGT last month since the stock has taken a beating lately. Looks like I also purchased it around the same time as you did and at a slightly higher price. I have documented my purchase here.

    http://dividendgrowthjourney.wordpress.com/2014/05/08/recent-purchase-tgt/

    I hope they choose a fitting CEO and the stock bounces back along with dividend growth for years to come as I hope to hold the stock for long term.

    I am also looking to invest in stocks like KO. PEP and JNJ over the next month or so.

     
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    1. My Dividend Growth

      DG Journey,

      Glad to have you as a fellow shareholder. Hopefully Target rebounds like a dividend champion should. Great post there, I like your blog!

      All those mentioned are great DGI picks I can’t wait to get a hold of.

      Thank you much for stopping by, I’ll be checking in on your progress so keep up the great work! 🙂

       
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