Sell Target (TGT) at the Market

Target (TGT) last appeared on our June 25, 2011 U.S. Dividend Watch List (found here).  At the time, TGT had a dividend yield of 2.59% and was trading at $46.33.  However, Fitch rating agency had just downgraded the company from A to A-.  At the time, we said that TGT was undervalued with a yield of 2% and “…even more attractive at a 2.59% yield.”  Slightly more than one year later, Target is now selling at a 52-week high.

The chart below reflects just how much the market has come to realize the relative undervalued nature of TGT.

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Because Target (TGT) has gained +37.11% in capital appreciation plus +2.59% in reinvested dividend income, we recommend selling the principal portion that was invested and seek out new opportunities found on our current dividend watch lists.

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