GPC vs TGT: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
TGT yields 1.23% more than GPC. In dollar terms, GPC pays $4.09/share vs TGT's $4.50/share annually.
Dividend Growth
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: 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: 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 GPC vs TGT today?
At $147.18 per share, $10,000 buys about 67.9 shares of Genuine Parts Co (GPC). Each share pays $4.09 per year in dividends, so the position starts out generating roughly $278 per year — about $23 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: $112 per year more on the same $10,000 invested.
What could $10,000 of GPC or TGT income look like in 10 years?
Genuine Parts Co (GPC) has raised its dividend about 6.0% a year over the past five years. If that pace held, the $279 per year that $10,000 generates today at the current 2.79% yield would reach $501 per year by 2036 — a 5.0% 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 $501 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would GPC's dividend growth overtake TGT's higher yield?
It doesn't, on the trailing numbers. Target Corp (TGT) yields more today (4.01% vs 2.79%) and has also grown its dividend at least as fast (9.4% vs 6.0% a year over five years). Unless GPC accelerates its raises or TGT stumbles, GPC never closes the income gap — TGT wins on both current income and growth.
Can GPC and TGT afford their dividends?
Genuine Parts Co (GPC) earns $5.81 per share against $4.09 paid out in dividends — 1.4x coverage (a 70% 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 GPC if earnings weaken.
Which fits an early-retirement income portfolio better, GPC 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 $232 a month from Genuine Parts Co (GPC) at 2.79%.
TGT also leads on dividend growth (9.4% vs 6.0% a year over five years), so the trailing numbers favor it on both fronts.
On consistency: GPC has raised its dividend 39 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 $659/yr in GPC 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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