HRL vs TGT: Dividend Yield, Growth & Safety Comparison
Hormel Foods Corp /De/ (HRL) and Target Corp (TGT) are both in the Consumer Staples sector, making them natural rivals for dividend investors. HRL edges ahead on yield at 4.77% versus TGT's 4.01%. For dividend growth, HRL leads with a 5-year CAGR of 12.1% versus TGT's 9.4%. Both stocks carry a "Safe" dividend safety rating. TGT is a Dividend Aristocrat with 42 years of consecutive increases.
Key Metrics Comparison
| Metric | HRL | TGT |
|---|
| Dividend Yield | 4.77% | 4.01% |
| Annual Dividend | $1.16 | $4.50 |
| 5-Year CAGR | 12.1% | 9.4% |
| Payout Ratio | 1% | 55% |
| Consecutive Years | 0 | 42 |
| Price | $23.74 | $115.49 |
Yield Comparison
Hormel Foods Corp /De/ (HRL) currently yields 4.77%, which is attractive for the broader market. That's 0.76% more than Target Corp (TGT), which yields 4.01%. In dollar terms, HRL pays $1.16/share annually versus TGT's $4.50/share.
Dividend Growth
Over the past five years, HRL has grown its dividend at a 12.1% CAGR compared to TGT's 9.4%. HRL: Dividend growth is accelerating — the 3-year CAGR of 18.6% exceeds the 5-year rate of 12.1% and the 10-year rate of 11.5%. 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
HRL's dividend safety is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. 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. HRL's payout ratio of 1% is more conservative than TGT's 55%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in HRL generates approximately $477/year in dividend income, compared to $401/year from TGT — a difference of $76/year. At $100,000, that gap widens to $760/year.
Verdict
- Best for income: HRL
- Best for growth: HRL
- Best for safety: HRL
Frequently Asked Questions
Which has a higher dividend yield, HRL or TGT?
Hormel Foods Corp /De/ (HRL) has a higher dividend yield of 4.77% compared to Target Corp (TGT) at 4.01%.
Is HRL or TGT a better dividend growth stock?
Hormel Foods Corp /De/ has the stronger dividend growth with a 5-year CAGR of 12.1%, compared to Target Corp's 9.4%.
Which is safer for dividend income, HRL or TGT?
Hormel Foods Corp /De/'s dividend safety is rated "Safe" while Target Corp is rated "Safe." The payout ratio of 1% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 0.8x. 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 HRL vs TGT generate?
A $10,000 investment in HRL generates approximately $477/year in dividends, while the same amount in TGT generates about $401/year.
Is HRL or TGT a Dividend Aristocrat?
Target Corp is a Dividend Aristocrat with 42 consecutive years of increases. Hormel Foods Corp /De/ does not currently qualify for aristocrat status.
Which has a lower payout ratio, HRL or TGT?
Hormel Foods Corp /De/ has a lower payout ratio of 1% compared to Target Corp's 55%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
HRL vs TGT: which is better for retirement income?
It depends on your priorities. HRL for current income, HRL for dividend growth, HRL for safety. Many retirement investors hold both for diversification.
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