This Dividend King Yielding 3X the S&P 500 Looks Like a Buy Right Now.
2026-10-23 08:15
•John Ballard •The Motley Fool
•••••• • Axe Cap view
A Foreign Dividend Star, Worth Watching from Johannesburg
Target’s strong dividend and growing revenue streams make it an interesting name, even if it's US-listed.
Target stands out in a crowded US retail space with 55 years of dividend increases. Its 3% yield is triple that of the S&P 500, giving income-focused investors something to consider. Better yet, Target isn’t just coasting on history; its high-margin ad business, membership programs, and marketplace sales are all growing strongly — a sign management can pivot effectively. Valued at 15 times earnings versus the S&P 500’s 19, it looks reasonably priced for the quality it offers. South African investors can’t buy Target directly, but watching USD/ZAR matters here. If the rand weakens against the dollar, gains from Target’s shares could be offset by currency moves. For those cautious about local retail counters like Shoprite or Woolworths in volatile SA conditions, Target offers a neat foreign income proxy. The risk is US inflation or consumer spending shifts could blunt the turnaround story and hurt dividends. this is just our opinion and not financial advice
Consider adding exposure through offshore funds or ETFs tracking US Dividend Kings, if comfortable with currency risk. Avoid big local retail names for now given domestic pressures.
- USD/ZAR
- Target (TGT)
- US consumer downturn
- Rand weakening against USD
6/10
Target, a Dividend King with 55 consecutive years of dividend increases, currently yields 3%, triple the S&P 500's yield. The company is experiencing improved sales driven by high-margin revenue streams including advertising (up 20%), Target Circle 360 memberships (up 40%), and Target Plus marketplace (up 40%). With a payout ratio below 50% and shares trading at 15x earnings versus the S&P 500's 19x, analysts view the stock as attractively valued with potential for further upside as the turnaround continues.
Our take is based on reporting first published by The Motley Fool.