PG vs TGT: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
TGT yields 1.39% more than PG. In dollar terms, PG pays $4.18/share vs TGT's $4.50/share annually.
Dividend Growth
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: 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: 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 PG vs TGT today?
At $160.56 per share, $10,000 buys about 62.3 shares of PROCTER & GAMBLE Co (PG). Each share pays $4.18 per year in dividends, so the position starts out generating roughly $260 per year — about $22 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: $130 per year more on the same $10,000 invested.
What could $10,000 of PG or TGT income look like in 10 years?
PROCTER & GAMBLE Co (PG) has raised its dividend about 12.5% a year over the past five years. If that pace held, the $263 per year that $10,000 generates today at the current 2.63% yield would reach $851 per year by 2036 — a 8.5% 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 $851 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would PG's dividend growth overtake TGT's higher yield?
PROCTER & GAMBLE Co (PG) yields less today (2.63% vs 4.01%) but has grown its dividend faster — 12.5% vs 9.4% a year over the past five years. If both trends continued, a $10,000 position in PG would start out-earning the same position in TGT around 2042 (roughly 16 years from now), paying about $1,724 per year at the crossover. Before that point, TGT pays more each year; after it, the gap compounds in PG's favor.
Can PG and TGT afford their dividends?
PROCTER & GAMBLE Co (PG) earns $6.75 per share against $4.18 paid out in dividends — 1.6x coverage (a 62% payout ratio).
Target Corp (TGT) earns $8.25 per share against $4.50 paid out in dividends — 1.8x coverage (a 55% payout ratio).
Coverage is similar for both, so neither dividend looks meaningfully more stretched than the other on current earnings.
Which fits an early-retirement income portfolio better, PG 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 $219 a month from PROCTER & GAMBLE Co (PG) at 2.63%.
With a decade or more before the income is needed, PG's faster dividend growth (12.5% vs 9.4% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: 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 $1,103/yr in PG 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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