Key Points Target has been hit hard by consumer spending pressures. But it continues to rake in the free cash flow to support its growing high-yield dividend. Target’s dividend is so strong that it rivals well-known consumer staples names Coca-Cola and PepsiCo. 10 stocks we like better than Target › Dividend stocks add a passive income element to a financial portfolio rather than relying solely on potential capital gains to drive returns. High-yield dividend stocks can generate even more passive ...

Company Overview - McDonald's is positioned as a strong investment option, particularly for passive income through dividends, with an expected annual return of at least $1,000 on a $40,000 investment [2] - The company is on track to become a Dividend King by 2026, having raised its dividend for 49 consecutive years, which indicates a commitment to returning capital to shareholders [4] Financial Performance - McDonald's has produced a total return of 229% over the last decade, although its stock has only increased by nearly 15% in the last three years, underperforming the S&P 500's nearly 80% gain [5] - In the third quarter of 2025, McDonald's reported a 3.6% increase in comparable sales and an 8% growth in systemwide sales year over year, indicating resilience in its business model [8] Industry Context - The restaurant industry is facing challenges due to reliance on consumer discretionary spending, with sit-down restaurants struggling more than quick-service options like McDonald's [8] - McDonald's business model is considered recession-resistant, appealing to risk-averse investors, supported by predictable cash flow from franchisees [7]

Core Viewpoint - Walmart is considered a long-term investment due to its recession-proof nature and consistent performance over decades [1][2]. Group 1: Business Resilience - Walmart is seen as a safe haven during economic downturns, as consumers tend to prioritize essential items over luxury goods [4][5]. - The company excels in providing essential goods such as groceries and hygiene products, which are less likely to be cut from consumer budgets during tough times [5][6]. - Walmart benefits significantly from the "trade-down" effect, where consumers shift from higher-end retailers to Walmart in search of lower prices during economic challenges [7]. Group 2: Financial Stability - Walmart has a market capitalization of $891 billion, with a current stock price of $111.74 and a gross margin of 23.90% [9]. - The company has a strong dividend history, having paid and increased its dividend for 52 consecutive years, qualifying it as a Dividend King [9]. - Walmart's cash flow is robust, allowing it to maintain its dividend even during economic fluctuations, providing investors with consistent income [10].

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] - The S&P 500 recently reached an all-time high, with technology stocks comprising 35% of the index, making utilities a favorable investment option in the current market [2] - The investment group offers high-yield, dividend growth ideas, targeting dividend yields up to 10% across various asset classes including REITs, ETFs, and closed-end funds [2]

Core Insights - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1][2] - The S&P 500 has reached an all-time high, with technology stocks comprising 35% of the index, making utilities a favorable investment option in the current market [2] Investment Strategy - The investment group iREIT+HOYA Capital emphasizes high-yield, dividend growth investment ideas, targeting dividend yields up to 10% [2] - The group provides research on various asset classes including REITs, ETFs, closed-end funds, preferreds, and dividend champions, aimed at achieving dependable monthly income [2] Market Context - The current market is described as "frothy," indicating potential volatility, which makes defensive stocks, particularly in the utilities sector, an attractive option for investors [2]

Financial Performance - AbbVie reported adjusted diluted profits per share of $1.86 for the quarter and increased its full-year 2025 adjusted EPS outlook to a range of $10.61 to $10.65 [1] - The company achieved net revenues of $15.7 billion, representing a 9.1% year-over-year increase, driven by its immunology and neuroscience portfolios [3] - Adjusted diluted EPS of $2.80 grew 15.7% year-over-year, with management raising full-year 2025 guidance to approximately $10.85 at the midpoint [13] Dividend Policy - AbbVie has paid and increased dividends for the past 54 years, earning the title of a Dividend King, and announced a 5.5% dividend increase starting February 2026, raising the quarterly payout to $1.73 per share [1] - Since its inception in 2013, AbbVie has increased its dividend by more than 330%, showcasing its commitment to income-focused investors [1] - The company currently pays an attractive yield of 3.04%, significantly higher than the healthcare average of 1.6% [1] Revenue Growth by Segment - Neuroscience revenues increased by more than 20% to $2.841 billion, with key drugs like Vraylar, Botox Therapeutic, Ubrelvy, and Qulipta showing strong growth [2] - The immunology portfolio generated $7.8 billion in quarterly revenue, a roughly 12% increase, with Skyrizi and Rinvoq leading the growth [3] - Skyrizi alone generated $4.7 billion in revenue, up over 47%, while Rinvoq grew by more than 35% to $2.18 billion [3] Market Performance - AbbVie stock has soared 29% year-to-date, outperforming the S&P 500 Index gain of 17.4% [4] - Wall Street analysts have assigned a "Moderate Buy" rating to AbbVie, with a mean target price of $245.84, indicating a potential upside of 7.8% from current levels [6]

Core Viewpoint - Stanley Black & Decker's recent asset sale is expected to strengthen its balance sheet and alleviate concerns about a potential dividend cut, marking a potential turning point for the stock [1][9]. Group 1: Asset Sale and Financial Strategy - The company has announced a significant asset sale of its aerospace manufacturing business to Howmet Aerospace for $1.8 billion in cash, which is part of a multi-year restructuring plan aimed at achieving $2 billion in pre-tax cost savings by the end of 2025 [3][4]. - The aerospace unit is projected to generate $405 million to $415 million in fiscal year 2025, and the sale proceeds will be used to reduce debt, targeting a net debt-to-adjusted EBITDA leverage ratio of 2.50 [4][7]. Group 2: Market Performance and Investor Sentiment - Following the announcement, shares of Stanley Black & Decker rose by 6.8%, reflecting positive investor sentiment towards the company's strategic moves [1]. - The stock is recognized as a Dividend King, having raised its dividend for 58 consecutive years, and the asset sale is expected to support future dividend growth and share repurchases, addressing investor concerns regarding high debt and weak cash flows [8][9]. Group 3: Company Overview - Stanley Black & Decker has a market capitalization of $11 billion, with a current stock price of $75.39 and a dividend yield of 4.54% [6][7]. - The company is focused on divesting non-core assets and simplifying its supply chain to strengthen its core business operations [3].

Company Overview - Coca-Cola is a mega-cap company with a market value of $302 billion, selling over 200 varieties of drinks and serving 2.2 billion servings daily across more than 200 countries and territories [1]. Brand Strength - The defining attribute of Coca-Cola is its brand name, supported by unrivaled distribution, strong marketing, and consistent product quality, making it one of the most recognizable brands globally [3]. - Warren Buffett's investment in Coca-Cola, with Berkshire Hathaway owning 400 million shares, highlights the brand's strength and value [4]. Pricing Power and Financial Performance - Coca-Cola's brand supports its pricing power, allowing management to implement a 4% price growth in the third quarter, which boosts revenue despite limited unit volume growth [5]. - The company has demonstrated impressive profits, with a trailing 10-year operating margin of 26.4%, largely due to reliance on third-party bottlers and distribution partners [6]. Stability and Longevity - Coca-Cola's staying power is a significant asset, as it has remained relevant since its founding in 1886, with operations evolving primarily through product portfolio expansion and market entry [7][8]. - The non-alcoholic ready-to-drink beverage industry, where Coca-Cola operates, is not prone to technological disruption, contributing to the company's stability [9].

Core Insights - Interest rates are declining, with the 30-year fixed mortgage average approaching a critical threshold of 6%, which could stimulate demand in Sherwin-Williams' Paint Stores segment [1][5] - The company is facing a challenging environment due to a sluggish housing market and flat home sales, impacting consumer spending on paint [1][2] - Despite a year-to-date decline of approximately 4% in Sherwin-Williams shares, the S&P 500 has risen by 15%, indicating underperformance [2] Financial Performance - Sherwin-Williams has a strong history of dividend increases, marking its 47th consecutive year of growth, with a recent 10.5% hike [3][10] - The company has repurchased over 53 million shares in the last decade, representing over 20% of outstanding shares, which supports earnings per share and share price [3] - In the most recent quarter, Sherwin-Williams reported year-over-year earnings and revenue growth of 3.3% and 3.2%, respectively [5][8] Historical Context - Since its IPO in 1965, Sherwin-Williams has experienced a remarkable 115,000% increase in share price, with net income rising from $1.06 million in Q2 1965 to $754.7 million in Q2 2025, equating to a 7,200% increase when adjusted for inflation [4] Market Outlook - The Federal Reserve is expected to announce further interest rate cuts, which could provide relief to Sherwin-Williams in the coming weeks [6][7] - The company has previously paused its 401(k) match during economic downturns, indicating a strategic response to challenging market conditions [9] Investment Considerations - Despite current challenges, Sherwin-Williams is viewed as a long-term hold due to its strong dividend growth and historical performance [11] - The company is on the verge of achieving Dividend King status, a milestone reached by only 55 out of approximately 53,000 publicly traded companies [10]

Core Viewpoint - Clorox, a Dividend King, is currently facing challenges but presents a strong investment opportunity due to its high dividend yield and potential for recovery [1][12][17] Group 1: Company Challenges - Clorox has experienced a nearly 60% decline from its peak stock price due to multiple issues, including increased production costs, inflation, and a severe cyberattack in 2023 that cost approximately $380 million [1][5][6] - The transition to new enterprise resource planning (ERP) software has also contributed to operational disruptions, impacting revenue and earnings [6][12] Group 2: Business Performance Indicators - Despite recent struggles, Clorox's revenue and profits have shown improvement since 2024, with a notable rebound in return on invested capital (ROIC), currently at 25%, aligning with pre-pandemic levels [7][9] - Clorox's product innovation and strong brand reputation help maintain its competitive edge, despite the commoditized nature of some of its products [10][11] Group 3: Dividend and Valuation - Clorox boasts a current dividend yield of nearly 5%, the highest in its history, and has a dividend payout ratio of 72% of next year's earnings estimates, which is manageable given its strong balance sheet [12][14] - The stock is currently undervalued with a price-to-earnings ratio of less than 15, suggesting potential for capital gains as the company regains market trust [16]