TGT vs WMT: Dividend Yield, Growth & Safety Comparison
Target Corp (TGT) and Walmart Inc. (WMT) are both in the Consumer Staples sector, making them natural rivals for dividend investors. TGT offers a significantly higher 4.01% yield compared to WMT's 0.72%, a gap of 3.29%. For dividend growth, TGT leads with a 5-year CAGR of 9.4% versus WMT's 6.4%. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | TGT | WMT |
|---|
| Dividend Yield | 4.01% | 0.72% |
| Annual Dividend | $4.50 | $0.91 |
| 5-Year CAGR | 9.4% | 6.4% |
| Payout Ratio | 55% | 32% |
| Consecutive Years | 42 | 43 |
| Price | $115.49 | $133.79 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 3.29% more than Walmart Inc. (WMT), which yields 0.72%. In dollar terms, TGT pays $4.50/share annually versus WMT's $0.91/share.
Dividend Growth
Over the past five years, TGT has grown its dividend at a 9.4% CAGR compared to WMT's 6.4%. 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%. WMT: Dividend growth is accelerating — the 3-year CAGR of 11.2% exceeds the 5-year rate of 6.4% and the 10-year rate of 3.9%.
Dividend Safety
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. WMT's dividend safety is rated "Safe." The payout ratio of 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x. WMT's payout ratio of 32% is more conservative than TGT's 55%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $72/year from WMT — a difference of $329/year. At $100,000, that gap widens to $3290/year.
Verdict
- Best for income: TGT
- Best for growth: TGT
- Best for safety: WMT
Frequently Asked Questions
Which has a higher dividend yield, TGT or WMT?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to Walmart Inc. (WMT) at 0.72%.
Is TGT or WMT a better dividend growth stock?
Target Corp has the stronger dividend growth with a 5-year CAGR of 9.4%, compared to Walmart Inc.'s 6.4%.
Which is safer for dividend income, TGT or WMT?
Target Corp's dividend safety is rated "Safe" while Walmart Inc. is rated "Safe." The payout ratio of 55% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.8x. The payout ratio of 32% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 3.1x.
How much income does $10,000 in TGT vs WMT generate?
A $10,000 investment in TGT generates approximately $401/year in dividends, while the same amount in WMT generates about $72/year.
Is TGT or WMT a Dividend Aristocrat?
Target Corp is a Dividend Aristocrat (42 years) and Walmart Inc. is a Dividend Aristocrat (43 years).
Which has a lower payout ratio, TGT or WMT?
Walmart Inc. has a lower payout ratio of 32% compared to Target Corp's 55%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
TGT vs WMT: which is better for retirement income?
It depends on your priorities. TGT for current income, TGT for dividend growth, WMT for safety. Many retirement investors hold both for diversification.
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