TGT vs ULTY: Dividend Comparison
Dividend data as of
Target Corp (TGT) from Consumer Staples and YieldMax Ultra Option Income Strategy ETF (ULTY) from N/A offer different dividend profiles for income-focused portfolios. ULTY offers a significantly higher 137.83% yield compared to TGT's 4.01%, a gap of 133.82%. For dividend growth, TGT leads with a 5-year CAGR of 9.4% versus ULTY's -88.4%. TGT is a Dividend Aristocrat with 42 years of consecutive increases.
Verdict
Yield Analysis
ULTY yields 133.82% more than TGT. In dollar terms, TGT pays $4.50/share vs ULTY's $45.23/share annually.
Dividend Growth
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%.
ULTY: Dividend growth has been steady, with a 3-year CAGR of -88.4% and a 5-year CAGR of -88.4% (10-year: -88.4%).
Dividend Safety
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 TGT vs ULTY today?
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.
At $34.47 per share, $10,000 buys about 290.1 shares of YieldMax Ultra Option Income Strategy ETF (ULTY). Each share pays $45.23 per year in dividends, so the position starts out generating roughly $13,120 per year — about $1,093 a month.
ULTY is the larger income stream from day one: $12,731 per year more on the same $10,000 invested.
What could $10,000 of TGT or ULTY income look like in 10 years?
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.
YieldMax Ultra Option Income Strategy ETF (ULTY)'s dividend has shrunk about 88.4% a year over the past five years. If that trend continued, today's $13,783 per year on $10,000 (at the current 137.83% yield) would fall to $0 per year by 2036.
On those trailing rates, TGT pays more in 2036: $982 versus $0 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would TGT's dividend growth overtake ULTY's higher yield?
Target Corp (TGT) yields less today (4.01% vs 137.83%) but has grown its dividend faster — 9.4% vs -88.4% a year over the past five years. If both trends continued, a $10,000 position in TGT would start out-earning the same position in ULTY around 2028 (roughly 2 years from now), paying about $480 per year at the crossover. Before that point, ULTY pays more each year; after it, the gap compounds in TGT's favor.
Why is there no payout ratio for ULTY?
REWD has neither an earnings-per-share figure nor a payout ratio for YieldMax Ultra Option Income Strategy ETF (ULTY) — typical for ETFs and covered-call funds, whose distributions are funded by the underlying portfolio (stock dividends, option premium, or return of capital) rather than a single company's earnings. For a fund, judge sustainability by the distribution history and the strategy behind it, not a payout ratio.
Target Corp (TGT) earns $8.25 per share against $4.50 paid out in dividends — 1.8x coverage (a 55% payout ratio). That's the usual corporate affordability test — it just doesn't translate to the fund side of this comparison.
Which fits an early-retirement income portfolio better, TGT or ULTY?
For income you need right now, YieldMax Ultra Option Income Strategy ETF (ULTY) leads: $100,000 invested today pays about $11,486 a month at the current 137.83% yield, versus $335 a month from Target Corp (TGT) at 4.01%.
With a decade or more before the income is needed, TGT's faster dividend growth (9.4% vs -88.4% 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 $1,456/yr in TGT vs $0/yr in ULTY 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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