AFL vs TGT: Dividend Yield, Growth & Safety Comparison
Aflac Inc (AFL) from Financials and Target Corp (TGT) from Consumer Staples offer different dividend profiles for income-focused portfolios. TGT offers a significantly higher 4.01% yield compared to AFL's 2.11%, a gap of 1.90%. For dividend growth, AFL leads with a 5-year CAGR of 15.1% versus TGT's 9.4%. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | AFL | TGT |
|---|
| Dividend Yield | 2.11% | 4.01% |
| Annual Dividend | $2.44 | $4.50 |
| 5-Year CAGR | 15.1% | 9.4% |
| Payout Ratio | 34% | 55% |
| Consecutive Years | 41 | 42 |
| Price | $115.04 | $115.49 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 1.90% more than Aflac Inc (AFL), which yields 2.11%. In dollar terms, TGT pays $4.50/share annually versus AFL's $2.44/share.
Dividend Growth
Over the past five years, AFL has grown its dividend at a 15.1% CAGR compared to TGT's 9.4%. AFL: Dividend growth is accelerating — the 3-year CAGR of 35.7% exceeds the 5-year rate of 15.1% and the 10-year rate of 15.7%. TGT: Dividend growth is slowing — the 3-year CAGR of 1.8% trails the 5-year rate of 9.4% and the 10-year rate of 11.1%.
Dividend Safety
AFL's dividend safety is rated "Safe." The payout ratio of 34% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.8x. TGT's dividend safety is rated "Safe." The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x. AFL's payout ratio of 34% is more conservative than TGT's 55%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $211/year from AFL — a difference of $190/year. At $100,000, that gap widens to $1900/year.
Verdict
- Best for income: TGT
- Best for growth: AFL
- Best for safety: AFL
Frequently Asked Questions
Which has a higher dividend yield, AFL or TGT?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to Aflac Inc (AFL) at 2.11%.
Is AFL or TGT a better dividend growth stock?
Aflac Inc has the stronger dividend growth with a 5-year CAGR of 15.1%, compared to Target Corp's 9.4%.
Which is safer for dividend income, AFL or TGT?
Aflac Inc's dividend safety is rated "Safe" while Target Corp is rated "Safe." The payout ratio of 34% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.8x. The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x.
How much income does $10,000 in AFL vs TGT generate?
A $10,000 investment in AFL generates approximately $211/year in dividends, while the same amount in TGT generates about $401/year.
Is AFL or TGT a Dividend Aristocrat?
Aflac Inc is a Dividend Aristocrat (41 years) and Target Corp is a Dividend Aristocrat (42 years).
Which has a lower payout ratio, AFL or TGT?
Aflac Inc has a lower payout ratio of 34% compared to Target Corp's 55%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AFL vs TGT: which is better for retirement income?
It depends on your priorities. TGT for current income, AFL for dividend growth, AFL for safety. Many retirement investors hold both for diversification.
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