After pounding investors with bad news over the past several weeks, Target (NYSE:TGT) finally gave investors something to cheer about today, although it likely won’t make up for the 32% year-to-date drop in the stock.
Target announced that it will be raising its dividend by 20% to $1.08 per share on a quarterly basis. This is equal to $4.32 on an annual basis, sporting an annual dividend yield of 2.8%.
Today’s news follows the retailer’s second-quarter profit warning in May and the second warning for the same quarter announced only on Tuesday. Target said it now expects a Q2 operating margin of around 2%, down from 5.3%. The company is also taking aggressive measures to handle its massive inventory surge.
This year’s dividend hike compares to last year’s hike of 32% but is still well above the hikes of only 3% for 2017-2020. Meanwhile, the yield on the dividend hasn’t been this high since 2019.
Target is a member of the S&P Dividend Aristocrat, having raised its dividend for 51 consecutive years.
The newly declared dividend is payable on September 10, 2022, to stockholders of record on August 17, 2022, with an ex-dividend date of August 16, 2022.