BDX vs TGT: Dividend Comparison
Dividend data as of
Becton Dickinson & Co (BDX) from Health Care 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 BDX's 2.36%, a gap of 1.65%. For dividend growth, TGT leads with a 5-year CAGR of 9.4% versus BDX's 6.2%. TGT holds the edge in dividend safety with a "Safe" rating. Both are classified as Dividend Aristocrats.
Verdict
Yield Analysis
TGT yields 1.65% more than BDX. In dollar terms, BDX pays $4.20/share vs TGT's $4.50/share annually.
Dividend Growth
BDX: Dividend growth has been steady, with a 3-year CAGR of 6.5% and a 5-year CAGR of 6.2% (10-year: 5.2%).
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
BDX: The payout ratio of 68% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.5x.
TGT: The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in BDX vs TGT today?
At $177.39 per share, $10,000 buys about 56.4 shares of Becton Dickinson & Co (BDX). Each share pays $4.20 per year in dividends, so the position starts out generating roughly $237 per year — about $20 a month.
At $115.49 per share, $10,000 buys about 86.6 shares of Target Corp (TGT). Each share pays $4.50 per year in dividends, so the position starts out generating roughly $390 per year — about $32 a month.
TGT is the larger income stream from day one: $153 per year more on the same $10,000 invested.
What could $10,000 of BDX or TGT income look like in 10 years?
Becton Dickinson & Co (BDX) has raised its dividend about 6.2% a year over the past five years. If that pace held, the $236 per year that $10,000 generates today at the current 2.36% yield would reach $431 per year by 2036 — a 4.3% yield on the original cost.
Target Corp (TGT) has raised its dividend about 9.4% a year over the past five years. If that pace held, the $401 per year that $10,000 generates today at the current 4.01% yield would reach $982 per year by 2036 — a 9.8% yield on the original cost.
On those trailing rates, TGT pays more in 2036: $982 versus $431 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would BDX's dividend growth overtake TGT's higher yield?
It doesn't, on the trailing numbers. Target Corp (TGT) yields more today (4.01% vs 2.36%) and has also grown its dividend at least as fast (9.4% vs 6.2% a year over five years). Unless BDX accelerates its raises or TGT stumbles, BDX never closes the income gap — TGT wins on both current income and growth.
Can BDX and TGT afford their dividends?
Becton Dickinson & Co (BDX) earns $6.12 per share against $4.20 paid out in dividends — 1.5x coverage (a 68% payout ratio).
Target Corp (TGT) earns $8.25 per share against $4.50 paid out in dividends — 1.8x coverage (a 55% payout ratio).
TGT's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for BDX if earnings weaken.
Which fits an early-retirement income portfolio better, BDX or TGT?
For income you need right now, Target Corp (TGT) leads: $100,000 invested today pays about $335 a month at the current 4.01% yield, versus $197 a month from Becton Dickinson & Co (BDX) at 2.36%.
TGT also leads on dividend growth (9.4% vs 6.2% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: BDX has raised its dividend 43 consecutive years; TGT has raised its dividend 42 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $544/yr in BDX vs $1,456/yr in TGT by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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