Bert’s Recent Buy – Target (TGT)

I just couldn’t sit on the sideline any longer.  For those of you that have followed our blog over the last month, you would have realized that there was one stock I have been fixated on…Target (TGT).  It was the number 1 stock on my June watch list for a reason.  Over the month, I was patiently waited for the right moment to strike.  When I went to buy, the stock price increased.  When I wasn’t able t access the internet to actually purchase the stock, the price fell.   Finally, the stars aligned as the markets had two terrible days after the Brexit situation.   Time to check out why and most importantly, how much TGT stock I purchased this week!

This week, I purchased 50 shares of Target (“TGT”) at $67.96/share.  Luckily for me, I had a free trade credit with Capital One Investing; so the total cost of the purchase was only $3,397.90.  This purchase added $120 to my forward dividend income, bring my total dividend income total to $2,912.  Man am I close to crossing $3,000!  Watch out Lanny, I’ll pass you and your recent milestone before you know it!  This may sound strange, but the purchase just felt right and I couldn’t be happier to add the company to my portfolio.  Here were some of the reasons why I purchased TGT and some other fun facts/things about the purchase that I wanted to note to all of you:

  • The metrics CRUSHED our stock screener and overall were looking very good.   I won’t go into too much detail about them because Lanny did a great job summarizing them when he purchased the stock a couple of weeks ago.  For the detail behind the metrics, I suggest reading his TGT purchase article!  Buy some of the metrics that jumped out to me were the dividend yield (3.5% at the time of purchase), payout ratio (47%), dividend growth rate (5 Year Average DGR = 15%, 3 Year Average DGR = 11%), and P/E Ratio (slightly over 13X at time of purchase).  As I said earlier, some great looking metrics.
  • I wanted to focus back to the topic of dividend growth.  The recent dividend growth is impressive, especially considering the trend over the last year has been to lower your dividend growth rate or even cut it!  TGT’s last dividend increase was  7% and represented TGT’s 45th annual dividend increase…aka TGT is a Dividend Aristocrat.  One of my 2016 goals was to invest in 5 new Dividend Aristocrats to improve the quality of my dividend income stream.  Before this purchase, I had only 1 to date.  So now, I have now accomplished 40% of this goal.  Inching closer, but still some work to do!
  • Over the last year I have taken steps to diversify my portfolio and reduce my allocation in oil and utility stocks.  My purchases this year have been in financial (Citizens and Northern) and Asset Management (T.Rowe Price), and pharmaceutical (Pfizer).  What’s funny is that through this, I have never purchased a large retail store.  And I love stocks that impact consumers daily life.  Well, with this purchase, I have officially added a new industry to my portfolio.  Any chance you can to diversify your portfolio with a great yield and a strong company, how can you say no?
  • Earlier in the year Lanny got me hooked on the concept of buying stocks in large purchases.  It was nice to unload nearly $3,400 and buy an even 50 shares of the company.  Hypothetically, if the price remained the same for the next four quarters, DRIPing $120 in dividend income would net me about 1.8 shares, which would then increase my forward income by $4.23 anually.  You all know and get the point I am trying to make.  The larger the purchase, the larger the DRIP, and the sooner the power of dividend re-investing begins to pay dividends.
  • First, I don’t ever buy a stock off of sentiment.  Heck, if I bought every product my wife and I used my portfolio and dividend income would both be terrible! So this point is more of a bonus or icing on the cake fact.  What made this purchase fun was the first  joint stock my new wife and I purchased together happened to be the one place that we shop at more than any other store.   Owning stock in the company will make shopping there even more fun and every purchase we make is contributing to the company’s ability to grow its dividend.  That’s a win-win, right?  Now I must spend more while shopping!  Kidding, kidding, especially after Lanny’s “Every Dollar Count” has motivated me to save as much as possible to invest now!

A great stock, with a great dividend history, showing some great dividend metrics, at a great price…..how could I say no to purchasing shares?  I mentioned earlier that I couldn’t be happier with my purchase and I was even reminded of this as I wrote the article.  TGT just happened to be the perfect fit for me!  I guess you can add me to the growing list of dividend growth investors in the community that purchased TGT over the last few weeks.

What are your thoughts on my purchase?  Would you have added TGT or opted for Walmart instead?   If you weren’t watching Target, what industries are you watching instead?  Or are you sitting on the sideline all together as the Brexit dust settles?

-Bert

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17 thoughts on “Bert’s Recent Buy – Target (TGT)

    • Thanks More Dividends! They have been quite the darling of the dividend community recently, for good reason in my opinion. Do you own any shares? If not, are you watching them??

      Bert

      • Yes they have been a darling lately. In my Retail sector I got in on Wal-Mart at a good price and have been watching Target to start a position. I have my eye on a couple of stocks… hopefully I will get the chance to pick up some Target soon!

  1. I’m a newbie so take my opinion with a grain of salt but I also think TGT is a great buy and it was one of the first companies I bought in my opening foray 3 weeks ago.

    • New or old the game, it doesn’t matter. Each opinion is valuable and can bring a new perspective to the table. Too much information is never a bad thing. Congrats on opening up the account! I can’t think of a better stock to start your journey off with.

      Bert

  2. That’s a terrible purchase! Just joking, I bought some TGT a few weeks ago and will be glad if it drops further for additional buys.

    • D4s,

      hahaha I like it, too funny. Glad to call ourselves fellow shareholders now. There is definitely the option to continue adding if the price continues to fall. I’ll keep my fingers crosseed haha

      Bert

    • hahaha Dividend Ten! That’s definitely happened to me before. The other hard part is that you walk in with an empty cart and you leave with a trunk full of stuff…major major issues haha

      Bert

    • Agreed. It is an added benefit to investing. To drive to the other side of Cleveland I have to pass a KMI site. Despite how angry I am at that stock after the dividend cut, I still take pride in the fact that I am an owner of that company.

      Bert

  3. I added a few more shares a few weeks back. I own it in my Loyal3 account, so I’ve been gradually building a position a few shares at a time, particularly as it dipped from the 80’s into the 70’s and now to the current price. I’d say I’m around the halfway point for my desired position. Barring a major pullback from market conditions, I’m holding off on buying more shares at this point until the next earnings report. While I don’t think the bathroom fiasco will have any kind of significant long-term impact, I could see TGT reporting a mediocre quarter or two, and I think that will offer up better prices.

    If I guess wrong though, I’ve still nibbled along the price range and won’t beat myself up too badly if it goes up instead.

    • There is nothing wrong with your approach. It is a little bit of a gamble, but you have seemed to be happy with either outcome. If the price goes up, you can look elsewhere for other discounted stocks and circle back to Target at a later date. There will be other opportunities in the future. Nice job getting a position started though and getting something going!

      Bert

  4. Finally got that price point you wanted. Wish I bought more shares around that level but what can you do. Looking for another dip for some more!

  5. Congrats on the buy Bert, looks like you got it for a good purchase. Not sure about the long, long term bricks and mortar growth, but we’ll see 🙂

    Tristan

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