Undervalued Target Corp – 16% Shareholder Yield

Johnny HopkinsStocks, TGTLeave a Comment

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One of the cheapest stocks in our Large Cap 1000 – Stock Screener is Target Corporation (NYSE:TGT).

Target Corporation (Target) is a discount retailer that offers everyday essentials and merchandise to its customers. The company sells a range of general merchandise and food through its stores and digital channels. General merchandise stores offer an edited food assortment, including perishables, dry grocery, dairy and frozen items. Digital channels include a range of general merchandise, including various items found in its stores, along with a complementary assortment, such as additional sizes and colors sold only online.

Target is a company that retains a strong brand following the hacking debacle in 2013. Under the guidance of Brian Cornell, Target made the correct decision to divest its loss making business in Canada, and more recently its pharmacy and clinic business. The company is squarely focused on its U.S. operations with the successful roll out of its smaller footprint “flex-format” stores that are customised according to the demographic of their neighborhood.

Target is also starting to see significant growth in its online digital offering highlighted by December digital sales growth of more that 40 percent. The company generates loads of free cashflow and is shareholder friendly with the most recent authorisation of a new $5 billion share repurchase program off the back of its current $10 billion program. This equates to a buy-back yield of 12% (ttm), a dividend yield of 4% (ttm), and a shareholder yield of 16% (ttm).

Get our full stock analysis on Target at ValueWalk here.

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