PG vs TGT: Dividend Yield, Growth & Safety Comparison
PROCTER & GAMBLE Co (PG) and Target Corp (TGT) are both in the Consumer Staples sector, making them natural rivals for dividend investors. TGT offers a significantly higher 4.01% yield compared to PG's 2.63%, a gap of 1.39%. For dividend growth, PG leads with a 5-year CAGR of 12.5% versus TGT's 9.4%. TGT holds the edge in dividend safety with a "Safe" rating. TGT is a Dividend Aristocrat with 42 years of consecutive increases.
Key Metrics Comparison
| Metric | PG | TGT |
|---|
| Dividend Yield | 2.63% | 4.01% |
| Annual Dividend | $4.18 | $4.50 |
| 5-Year CAGR | 12.5% | 9.4% |
| Payout Ratio | 62% | 55% |
| Consecutive Years | 0 | 42 |
| Price | $160.56 | $115.49 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 1.39% more than PROCTER & GAMBLE Co (PG), which yields 2.63%. In dollar terms, TGT pays $4.50/share annually versus PG's $4.18/share.
Dividend Growth
Over the past five years, PG has grown its dividend at a 12.5% CAGR compared to TGT's 9.4%. PG: Dividend growth is accelerating — the 3-year CAGR of 21.6% exceeds the 5-year rate of 12.5% and the 10-year rate of 8.5%. 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
PG's dividend safety is rated "Moderate." The payout ratio of 62% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x. 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 PG's 62%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $263/year from PG — a difference of $138/year. At $100,000, that gap widens to $1380/year.
Verdict
- Best for income: TGT
- Best for growth: PG
- Best for safety: TGT
Frequently Asked Questions
Which has a higher dividend yield, PG or TGT?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to PROCTER & GAMBLE Co (PG) at 2.63%.
Is PG or TGT a better dividend growth stock?
PROCTER & GAMBLE Co has the stronger dividend growth with a 5-year CAGR of 12.5%, compared to Target Corp's 9.4%.
Which is safer for dividend income, PG or TGT?
PROCTER & GAMBLE Co's dividend safety is rated "Moderate" while Target Corp is rated "Safe." The payout ratio of 62% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x. 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 PG vs TGT generate?
A $10,000 investment in PG generates approximately $263/year in dividends, while the same amount in TGT generates about $401/year.
Is PG or TGT a Dividend Aristocrat?
Target Corp is a Dividend Aristocrat with 42 consecutive years of increases. PROCTER & GAMBLE Co does not currently qualify for aristocrat status.
Which has a lower payout ratio, PG or TGT?
Target Corp has a lower payout ratio of 55% compared to PROCTER & GAMBLE Co's 62%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
PG vs TGT: which is better for retirement income?
It depends on your priorities. TGT for current income, PG for dividend growth, TGT for safety. Many retirement investors hold both for diversification.
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