BDX vs TGT: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | BDX | TGT |
|---|
| Dividend Yield | 2.36% | 4.01% |
| Annual Dividend | $4.20 | $4.50 |
| 5-Year CAGR | 6.2% | 9.4% |
| Payout Ratio | 68% | 55% |
| Consecutive Years | 43 | 42 |
| Price | $177.39 | $115.49 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 1.65% more than Becton Dickinson & Co (BDX), which yields 2.36%. In dollar terms, TGT pays $4.50/share annually versus BDX's $4.20/share.
Dividend Growth
Over the past five years, TGT has grown its dividend at a 9.4% CAGR compared to BDX's 6.2%. 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's dividend safety is rated "Moderate." 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'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. TGT's payout ratio of 55% is more conservative than BDX's 68%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $236/year from BDX — a difference of $165/year. At $100,000, that gap widens to $1650/year.
Verdict
- Best for income: TGT
- Best for growth: TGT
- Best for safety: TGT
Frequently Asked Questions
Which has a higher dividend yield, BDX or TGT?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to Becton Dickinson & Co (BDX) at 2.36%.
Is BDX or TGT a better dividend growth stock?
Target Corp has the stronger dividend growth with a 5-year CAGR of 9.4%, compared to Becton Dickinson & Co's 6.2%.
Which is safer for dividend income, BDX or TGT?
Becton Dickinson & Co's dividend safety is rated "Moderate" while Target Corp is rated "Safe." 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. 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 BDX vs TGT generate?
A $10,000 investment in BDX generates approximately $236/year in dividends, while the same amount in TGT generates about $401/year.
Is BDX or TGT a Dividend Aristocrat?
Becton Dickinson & Co is a Dividend Aristocrat (43 years) and Target Corp is a Dividend Aristocrat (42 years).
Which has a lower payout ratio, BDX or TGT?
Target Corp has a lower payout ratio of 55% compared to Becton Dickinson & Co's 68%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
BDX vs TGT: which is better for retirement income?
It depends on your priorities. TGT for current income, TGT for dividend growth, TGT for safety. Many retirement investors hold both for diversification.
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