Target vs. Walmart: What's the Better Dividend Stock to Buy and Hold?

Core Viewpoint - Target and Walmart are leading retail stocks that offer potential for long-term growth and dividend income, with Walmart currently outperforming Target in stock performance [1][2]. Dividend Performance - Walmart's current dividend yield is approximately 1%, below the S&P 500 average of 1.2%, while Target offers a higher yield of 3.4% [3][4]. - To receive a $1,000 dividend from Walmart, an investment of around$100,000 is needed, whereas less than $30,000 is required for the same dividend from Target [4]. Dividend Growth - Target has increased its dividend by nearly 2% this year, marking the 53rd consecutive year of dividend increases, while Walmart raised its dividend by 9% in February, achieving 51 consecutive years of increases [6][7]. - Over the past decade, Target has doubled its dividend, significantly outpacing Walmart's 27.04% increase [8]. Payout Ratios - Both companies maintain payout ratios below 50%, with Walmart at 33.23% and Target at 46.70%, indicating sustainable dividend payments [9][11]. - A lower payout ratio for Walmart suggests a preference for retaining earnings for growth strategies rather than distributing them to shareholders [10]. Investment Considerations - Target's current struggles due to weak demand for discretionary products may improve with better economic conditions, presenting a potential value opportunity compared to Walmart's higher valuation [12]. - For long-term dividend income investors, Target may represent a more attractive investment option than Walmart at this time [13].