GPC vs TGT: Dividend Yield, Growth & Safety Comparison
Genuine Parts Co (GPC) from Consumer Discretionary 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 GPC's 2.79%, a gap of 1.23%. For dividend growth, TGT leads with a 5-year CAGR of 9.4% versus GPC's 6.0%. TGT holds the edge in dividend safety with a "Safe" rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | GPC | TGT |
|---|
| Dividend Yield | 2.79% | 4.01% |
| Annual Dividend | $4.09 | $4.50 |
| 5-Year CAGR | 6.0% | 9.4% |
| Payout Ratio | 70% | 55% |
| Consecutive Years | 39 | 42 |
| Price | $147.18 | $115.49 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 1.23% more than Genuine Parts Co (GPC), which yields 2.79%. In dollar terms, TGT pays $4.50/share annually versus GPC's $4.09/share.
Dividend Growth
Over the past five years, TGT has grown its dividend at a 9.4% CAGR compared to GPC's 6.0%. GPC: Dividend growth is slowing — the 3-year CAGR of 4.1% trails the 5-year rate of 6.0% and the 10-year rate of 5.1%. 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
GPC's dividend safety is rated "Moderate." The payout ratio of 70% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. 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 GPC's 70%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $279/year from GPC — a difference of $122/year. At $100,000, that gap widens to $1220/year.
Verdict
- Best for income: TGT
- Best for growth: TGT
- Best for safety: TGT
Frequently Asked Questions
Which has a higher dividend yield, GPC or TGT?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to Genuine Parts Co (GPC) at 2.79%.
Is GPC or TGT a better dividend growth stock?
Target Corp has the stronger dividend growth with a 5-year CAGR of 9.4%, compared to Genuine Parts Co's 6.0%.
Which is safer for dividend income, GPC or TGT?
Genuine Parts Co's dividend safety is rated "Moderate" while Target Corp is rated "Safe." The payout ratio of 70% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. 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 GPC vs TGT generate?
A $10,000 investment in GPC generates approximately $279/year in dividends, while the same amount in TGT generates about $401/year.
Is GPC or TGT a Dividend Aristocrat?
Genuine Parts Co is a Dividend Aristocrat (39 years) and Target Corp is a Dividend Aristocrat (42 years).
Which has a lower payout ratio, GPC or TGT?
Target Corp has a lower payout ratio of 55% compared to Genuine Parts Co's 70%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
GPC 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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