TGT vs XOM: Dividend Yield, Growth & Safety Comparison
Target Corp (TGT) from Consumer Staples and Exxon Mobil Corp (XOM) from Energy offer different dividend profiles for income-focused portfolios. TGT offers a significantly higher 4.01% yield compared to XOM's 2.64%, a gap of 1.38%. For dividend growth, XOM leads with a 5-year CAGR of 11.2% versus TGT's 9.4%. Both stocks carry a "Safe" dividend safety rating. Both are classified as Dividend Aristocrats.
Key Metrics Comparison
| Metric | TGT | XOM |
|---|
| Dividend Yield | 4.01% | 2.64% |
| Annual Dividend | $4.50 | $4.00 |
| 5-Year CAGR | 9.4% | 11.2% |
| Payout Ratio | 55% | 60% |
| Consecutive Years | 42 | 42 |
| Price | $115.49 | $148.59 |
Yield Comparison
Target Corp (TGT) currently yields 4.01%, which is attractive for the broader market. That's 1.38% more than Exxon Mobil Corp (XOM), which yields 2.64%. In dollar terms, TGT pays $4.50/share annually versus XOM's $4.00/share.
Dividend Growth
Over the past five years, XOM has grown its dividend at a 11.2% CAGR compared to TGT's 9.4%. 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%. XOM: Dividend growth is slowing — the 3-year CAGR of 4.3% trails the 5-year rate of 11.2% and the 10-year rate of 6.6%.
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. XOM's dividend safety is rated "Safe." The payout ratio of 60% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x. TGT's payout ratio of 55% is more conservative than XOM's 60%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in TGT generates approximately $401/year in dividend income, compared to $264/year from XOM — a difference of $137/year. At $100,000, that gap widens to $1370/year.
Verdict
- Best for income: TGT
- Best for growth: XOM
- Best for safety: TGT
Frequently Asked Questions
Which has a higher dividend yield, TGT or XOM?
Target Corp (TGT) has a higher dividend yield of 4.01% compared to Exxon Mobil Corp (XOM) at 2.64%.
Is TGT or XOM a better dividend growth stock?
Exxon Mobil Corp has the stronger dividend growth with a 5-year CAGR of 11.2%, compared to Target Corp's 9.4%.
Which is safer for dividend income, TGT or XOM?
Target Corp's dividend safety is rated "Safe" while Exxon Mobil Corp 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 60% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.7x.
How much income does $10,000 in TGT vs XOM generate?
A $10,000 investment in TGT generates approximately $401/year in dividends, while the same amount in XOM generates about $264/year.
Is TGT or XOM a Dividend Aristocrat?
Target Corp is a Dividend Aristocrat (42 years) and Exxon Mobil Corp is a Dividend Aristocrat (42 years).
Which has a lower payout ratio, TGT or XOM?
Target Corp has a lower payout ratio of 55% compared to Exxon Mobil Corp's 60%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
TGT vs XOM: which is better for retirement income?
It depends on your priorities. TGT for current income, XOM for dividend growth, TGT for safety. Many retirement investors hold both for diversification.
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