Target approved its 55th consecutive annual dividend increase, raising the payout by 1.8% to $4.64 per share annually, the smallest hike in 55 years. The modest increase comes as the retailer invests $5 billion to upgrade stores, technology, and product mix under new CEO Michael Fiddelke, with first-quarter fiscal 2026 net sales surging nearly 7% but profit falling 25% due to higher expenses. Negative free cash flow of $319 million in the quarter compared with $516 million in dividend payments, though the company holds $3.5 billion in liquidity and generated $2.8 billion in free cash flow in fiscal 2025. Target's dividend yield stands at 3.4%, well above the S&P 500 average, and its price-to-earnings ratio of nearly 18 is significantly lower than Walmart and Costco, which trade above 40 times earnings.
Target CorporationSmallest dividend hike in 55 years and negative free cash flow signal financial strain despite sales growth.
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