Target Raises Quarterly Dividend: What It Means for Investors in 2025

Target Corporation TGT has once again demonstrated its commitment to rewarding its shareholders by announcing a 1.8% increase in its quarterly dividend. The retail giant raised its dividend from $1.12 to $1.14 per common share, with the payout scheduled for Sept. 1, 2025, to shareholders of record as of Aug. 13.

This marks the company’s 232nd consecutive dividend payment since going public in 1967, underscoring its long-standing track record of financial stability and shareholder returns. With this latest increase, Target is on pace to achieve its 54th consecutive year of annual dividend growth, placing it among the most consistent dividend growers in the retail sector.

From a financial standpoint, Target maintains a dividend payout ratio of 55%, a dividend yield of 4.6% and a robust free cash flow yield of 7.8%. Its annual free cash flow return on investment of 9.3% further reinforces the sustainability of the increased dividend.

Beyond dividends, Target is also actively returning capital to its shareholders through buybacks. In first-quarter fiscal 2025, the company repurchased 2.2 million shares worth $251 million. As of quarter-end, it had approximately $8.4 billion remaining under its existing share repurchase program, authorized in August 2021.

For income-focused investors and dividend-growth seekers, Target’s consistent payout increases and active capital return strategy reflect a deep commitment to long-term financial performance and shareholder value. In today’s market, where total return matters, dividends and buybacks remain key incentives — TGT is delivering on both fronts.

What’s Ahead for Target in 2025?

Target began 2025 with a renewed focus on operational efficiency and delivering greater value to customers. The retailer has improved inventory reliability, enhanced fulfillment speeds and invested in store remodels and digital upgrades. Its third-party marketplace, Target Plus, continues to grow, supported by successful brand collaborations like the Kate Spade collection.

These efforts reflect Target’s long-term strategy to reinforce its competitive edge. However, recovery remains slower than expected. Discretionary categories such as apparel and home are still under pressure as inflation drives consumers toward essentials. Meanwhile, declining store traffic, cost pressures and weakness in higher-margin segments may weigh on near-term performance. Despite its strong brand equity, loyal customer base and nationwide presence, Target’s recovery is expected to remain gradual through the rest of 2025.

Target’s stock is down 26.6% year to date, underperforming its industry’s growth of 4.1%. The stock currently carries a Zacks Rank #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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