In prosperous economic times, retail sector stocks tend to perform very well, as cyclical stocks typically do in bull markets. Target Corp. (NYSE: TGT) has been a bellwether retail stock and has paid a dividend since it went public in 1967. While the retail sector has been under considerable pressure lately due to brick-and-mortar stores losing ground to internet sales, Target has adapted and outperformed its rivals in the brick-and-mortar retail industry. However, the company is in the middle of struggles due to reduced discretionary spending. Read on to learn how to buy Target stock.
How to Buy Target Stock
In order to purchase TGT stock, you need to deposit an appropriate amount of money in an account with a reputable stock broker that can execute trades on the New York Stock Exchange (NYSE).
If you just want to buy Target stock as an investment to hold in an account for the long term, perhaps to collect dividends and for capital appreciation, you could use a discount broker and save yourself some commissions. Keep in mind though that if you use a discount broker, you may not get access to any special features or research customarily offered by full-service brokers.
Your first order of business is to determine what you need from a broker to meet your requirements. Remember that how you buy Target stock is just as important as where you trade, so make sure you pick the right broker.
Pick a Broker
Once you have decided on what you need from a broker, you can now better assess which broker would best suit your needs. For example, if you have limited stock market experience and would like educational material in addition to an easy-to-navigate trading platform, you might choose TD Ameritrade or E*TRADE.
If you have a strong trading background, a substantial initial deposit and wish to trade through an advanced trading platform, you might pick Interactive Brokers. This broker caters mainly to well-financed and experienced traders who wish to access different financial markets and operate in a wide variety of tradable assets.
Assess Different Brokers' Trading Platforms
Most online brokers offer their customers a demo or practice account. These accounts are ideal for evaluating a broker's trading platform and services, in addition to letting you practice your trading and develop a winning strategy. You can open as many of these demo accounts as you wish and they can help you decide which would be the best online brokerage for your needs.
Trading platforms vary considerably from broker to broker, so make sure you feel comfortable with a broker's trading platform before you decide to open an account. Basically, once you have gotten used to and feel satisfied with a broker's trading platform, you can choose whether to open a live account with that broker.
Fund Your Trading Account
Before you can buy stock, you need to fund a trading account. Depending on the amount of Target stock you've budgeted for, you will need to deposit either that amount or the minimum deposit amount that the broker requires, whichever is greater.
While some brokers do not require a deposit to open an account, you will still need to make a deposit to buy Target stock. Most brokers let you deposit via credit card or bank transfer, so make sure you have the resources to fund the account.
Each broker has its own requirements for initial deposits and how to make one to fund a trading account, so be sure to check with the broker you are considering.
Buy Target Stock
Now you're ready to buy Target stock. Hopefully, you'll have enough experience trading in the demo account to know how to enter a buy order for the stock.
You might also want to take a couple of trading days to watch how TGT trades throughout the session. This will give you some insight into the stock's trading patterns and help you determine the best entry point to buy the Target Corp stock.
Also, check the latest Target news items and analyze the levels of supply and demand of the stock using technical analysis. After watching the stock and conducting your own market research and analysis, you should be ready to enter a bid for the stock either at the market or at some realistic level below the current market to get a better execution price.
Target (TGT) and Stock History
Target opened its first retail store in Minnesota in 1962 as part of the Dayton Company, which had originally started as Goodfellow Dry Goods in 1902. The company was renamed the Dayton Corporation in 1967 once it began offering shares to the public. In 1969, the company merged with Detroit-based J.L. Hudson Co. and was renamed Dayton-Hudson Corp.
Dayton-Hudson acquired more retailers like Mervyn's in 1978 and Marshall Field's in 1990. In 1999, Dayton-Hudson acquired Fedco to expand operations to Southern California. The company also started its online presence, Target.com, the same year. In 2000, Dayton-Hudson changed its name to Target Corporation since 80% of the company's business came from Target stores.
Target continued its acquisitions, and by 2011, the company announced its first international expansion into Canada — it purchased the 220-store leaseholds of Zellers, a Canadian chain store. That ambitious venture soured quickly because of poor supply chains and higher prices of goods. This prompted Target Canada to close all of its 133 outlets in Canada by April 2015. Target Canada cost the company $2.1 billion for its mere four years in business.
Future Outlook for Target
Target's stock performance since 2009 has demonstrated resilience, experiencing a steady uptrend on the entire stock market until the pandemic, which initially boosted sales as consumers shifted to online shopping. However, 2022 brought significant struggles due to rising inflation and changing consumer behaviors, leading to a drastic drop in stock value, which saw shares decline over 30%.
To maintain competitiveness, Target has implemented strategic promotions aimed at specific audiences, effectively catering to online shoppers and adapting to market demands. This has helped the retailer keep pace with industry peers during turbulent times.
Currently, analysts recommend a cautiously optimistic outlook, with a mix of buy and hold ratings reflective of Target’s potential for recovery. The P/E ratio stands around 15, indicating that shares are reasonably valued compared to historical performance, while the dividend yield remains attractive at approximately 2.5%. With a market cap nearing $70 billion, Target must continue leveraging both in-store and online platforms to innovate and respond to changing consumer needs to enhance its future growth prospects.
Why You Should Consider Buying Target Stock
Investing in Target stock presents a compelling opportunity for both seasoned investors and newcomers alike. Target Corporation, a leading retail giant, has demonstrated resilience and adaptability in an ever-evolving market. With a solid track record of robust financial performance, innovative strategies, and a commitment to sustainability, the company stands out as a strong candidate for long-term investment. Moreover, Target’s focus on enhancing customer experience through technological integration and diverse product offerings positions it well to compete against both traditional and online retailers. As consumers increasingly value convenience and quality, Target’s expansion into e-commerce and its omnichannel approach further solidify its market presence. This introduction lays the groundwork for exploring the key reasons why investing in Target stock could benefit your portfolio in the dynamic retail landscape.
Strong Financial Performance
Target has consistently demonstrated robust financial results, driven by its ability to manage costs while boosting sales. With steady revenue growth and healthy profit margins, Target stands out as a reliable investment choice in the retail sector.
Strategic Growth and Adaptability
Target's proactive approach to expanding its market presence through store remodels, enhanced digital capabilities, and a focus on e-commerce has positioned it well for future growth. The company’s adaptability in a rapidly changing retail landscape makes it a strong contender for long-term investors.
Attractive Dividend Yield
Target offers an appealing dividend yield, making it a compelling option for income-focused investors. The company's history of not only paying but consistently increasing dividends adds to its attractiveness as a stable, income-generating investment.
The Risk of Buying Target Stock
Investing in Target stock can be a compelling opportunity for both seasoned investors and newcomers alike, but it requires thoughtful consideration of various factors before making any financial commitment. Understanding the retail landscape, especially in an era marked by rapid changes in consumer behavior and digital shopping trends, is crucial in assessing Target's market position. Additionally, reviewing the company's financial health, dividend history, and future growth prospects will provide insight into its potential for delivering returns. Other important elements include evaluating macroeconomic conditions, competitive dynamics within the retail sector, and company-specific initiatives aimed at driving innovation and customer engagement. This overview will guide potential investors through essential considerations to ensure they make informed choices regarding Target stock.
Market Volatility
The stock market is inherently volatile, and even strong companies like Target are not immune to fluctuations. Economic downturns, shifts in consumer behavior, or unforeseen events can impact the stock price, potentially leading to short-term losses. Make sure you're prepared for market ups and downs before committing your capital.
Retail Sector Challenges
The retail industry is highly competitive, with shifting consumer behaviors and the ongoing rise of e-commerce. While Target has adapted well, these factors could impact its future growth. It's important to consider the challenges the sector faces and how they might affect Target's performance.
Economic Sensitivity
Target’s success is closely tied to broader economic conditions. Economic downturns, inflation, or changes in consumer spending can negatively impact sales and profitability. Assess how current and future economic trends might influence Target’s business before investing.
Is TGT Stock for You?
Target Corporation, a S&P 500 Dividend Aristocrat, has increased dividends for over 5 decades. With a current yield of 3%, Target is attractive for income-focused investors. Economic conditions should be considered when evaluating TGT stock. A strong economy can benefit Target through increased consumer spending. In a weak economy, Target's ability to remain profitable is important. Understanding these factors is key for investment decisions.
Target has a strong business foundation in the competitive retail industry due to its operational scale and diverse product range. Their innovative shopping options like same-day delivery and in-store pickup have increased customer loyalty and sales growth. TGT is recommended for investors looking for a reliable and established retailer with a solid dividend track record in the current market.
Want to learn more? Check out Benzinga's guide to the best retail stocks, best online brokerages, how to start trading stocks and the best investing courses.
Frequently Asked Questions
Is Target a good stock to buy now?
Target is a solid stock choice due to its resilience, successful online investments, and strong brand loyalty. However, ensure it aligns with your financial goals and risk tolerance before investing.
Is Target listed as a public stock?
Yes, Target is publicly traded on the New York Stock Exchange under the ticker “TGT.”.
Is Target a risky stock?
Target is seen as a stable investment, but risks include competition, shifting consumer behavior, and economic downturns. Investors should weigh these risks against potential rewards, considering their personal circumstances and risk tolerance.
About Jay and Julie Hawk
About Julie:
Julie Hawk earned her honors undergraduate degree from the University of Michigan before pursuing post-graduate scientific research at Cambridge University. She then started work in the private sector as a business systems analyst for a major investment bank, where she qualified as a Series 7 Registered Representative and received comprehensive training in various financial products. Further honing her skills, she attended the prestigious O’Connell and Piper options training course in Chicago, mastering professional option risk management techniques.
Julie then transitioned into the role of a professional Interbank forex trader, currency derivative risk manager and technical analyst, ascending to the position of vice president over a 12-year career in the financial markets. Julie’s illustrious banking career spanned working for major international banks in New York City, London, and San Francisco, where she served as an Interbank dealer, technical analyst, derivative specialist and risk manager. Her responsibilities included educating, devising customized foreign exchange hedging and risk-taking strategies, and overseeing large-scale transactions for esteemed banking clients, including corporations, fund managers and high-net-worth individuals. As part of her responsibilities, Julie managed substantial portfolios of forex options, spot, and futures positions as a currency options risk manager, earning recognition for executing innovative and highly profitable forex derivative transactions. Julie also spearheaded educational conferences on currency derivatives.
During her banking career, Julie attained world-class expertise in technical analysis, including Elliott Wave Theory, and pioneered research into automated trading and trading signal systems. An active member of the San Francisco Writers’ Guild, Julie also authored trade strategies, educational material, market commentary, newsletters, reports, articles, and press releases. She became a sought-after market expert who was frequently interviewed by financial magazines and news wires such as REUTERS.
Following her retirement from the banking sector, she dedicated 15 years to online forex trading, mentoring and freelance writing for TheFXperts, which she co-founded with her husband Jay. Julie is the co-author of “Forex Trading: A Beginner’s Guide” and “Technical Analysis for Financial Markets Traders,” in addition to five other books on financial markets trading and personal finance. She now focuses on writing articles on financial markets for platforms like Benzinga, although she continues to trade forex online and mentor fellow traders as part of TheFXperts’ financial team.
About Jay:
Jay Hawk grew up in Chicago and Mexico City where he became bilingual in English and Spanish. After taking formal training as a classical guitarist at prestigious music conservatories in Europe, Jay then embarked on a remarkable journey into the financial markets, cultivating his notable expertise through hands-on experience that began on the Midwest Stock Exchange.
His financial career progressed as he started actively participating in various exchange floor trading activities in the Chicago futures and options pits, where he worked his way up the ladder, serving as a clerk, trader, broker, investor and fund manager. Jay then ran a retail stock brokerage desk and managed funds for large institutional investors, leveraging his discretionary trading skills to yield profitable results for clients.
This ultimately led to Jay holding exchange seats and operating as a market maker on options exchanges in Chicago and San Francisco, initially on the Chicago Board Options Exchange. Jay also played a significant role in the Chicago Mercantile Exchange’s evolution, where he contributed to launching and actively trading the first listed currency futures options. After transitioning to the West Coast, Jay then held a seat and ventured into trading stock options and their underlying stocks on the Pacific Options Exchange.
Jay’s comprehensive understanding of fundamental economic and corporate analysis continues to inform his trading and investment activities and has led to his subsequent success as an expert financial writer. Together with his wife Julie, he co-authored “Stock Trading: A Beginner’s Guide”, “Commodity Trading: A Beginner’s Guide” and “Fundamental Analysis for Financial Markets Traders,” among their published books focusing on financial markets trading, market analysis, and personal finance.
As an integral member of TheFXperts’ team, Jay now excels in trading forex online for his personal account, mentoring aspiring traders and writing for financial platforms like Benzinga where he specializes in covering topics related to the stock and commodity markets, as well as investing, trading and reviewing online brokers.