Loyal3 Purchase: Target

Late last week I initiated a transaction for TGT in my Loyal3 account.   When you use a credit card (or a portion of the transaction goes on a card) it takes approximately 2 business days for the transaction to complete.  I had collected about $21 dollars in dividends and used another 29 from my budget for this transaction.  The purchase executed the following:

.8740 shares @ $57.21 adds ~$1.82 for the year

This purchase still leaves my portfolio with plenty of room for additional shares of TGT, which I may buy a larger stake soon depending on the availability/valuation of other dividend stocks.

TGT has had an interesting year.   TGT continues to have fallout from the customer data breach of last year.   This is the sad reality of the ever changing technology landscape.  Coming from a software background, the frequency of these events doesn’t surprise me and on a number of occasions my credit card has been stolen.   Fortunately, I have an aggressive bank that “knows me” well enough to stop those charges.  TGT is taking the event seriously and rolling out a series of changes that I feel will help mitigate future issues.  They have since hired Brad Maiorino to serve as the Chief Information Security Officer.

Oh Canada! TGT has struggled in Canada.  Have you seen those pictures of TGT stores with empty shelves? Google away if you haven’t.  Since that escapade, TGT has axed the leader of their Canadian operations.  I am not surprised that they struggled in Canada, WMT did too.  It does boggle me a bit that they didn’t learn from WMT’s mistakes.  As long as Target realizes that “Canadians are not Americans”, they should get on the right track.

The latest news is a massive dividend increase of 20.9%.  This raises the current yield to about 3.6% with $2.08 paid out yearly.  This was very surprising, I had expected a smaller dividend increase than the previous years given the preceding events.  I do like this move, it tells me that they are serious about the dividend and that it remains a priority.

Depending on the moves of the market, I may continue to add to TGT or one of the other positions that I currently hold in the Loyal3 account.

Thanks for reading!

Disclaimer: Long WMT,TGT

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6 Responses to Loyal3 Purchase: Target

  1. DivHut says:

    Thanks for sharing your most recent purchase. TGT continues to amaze me as so many bloggers are continuing to add to their TGT positions. I can see the allure especially after that crazy high dividend increase announced last week but I still see issues with TGT long term and do not feel comfortable initiating a position myself. Thanks again for sharing!

    • ILG says:

      Yeah, TGT is a small part of my portfolio and I don’t have any plans to significantly increase my position in the near term.

      It is just something I need to monitor and watch as time goes on.

  2. ILG,

    I really like TGT here, but with 70 shares I feel comfortable with my position size as it stands.

    But if I weren’t invested or had a smaller position I would definitely be buying here. I think the company certainly has its fair share of headwinds, but what company doesn’t? In the meanwhile, the yield is very healthy, the company remains committed to shareholders, and I can’t see them going much lower. The risk, in my opinion, is fairly small here at these prices.

    Best wishes.

    • ILG says:

      DM,

      70 shares is a pretty healthy chunk of TGT there! I am planning on slowly adding more TGT (or really any position in the Loyal3 account), due to the fee free transactions.

      I agree about the risk. TGT isn’t a business that is relying on one huge contract to succeed, so as long as I do my due diligence I feel like I will notice if the company gets to the point where I need to sell my position. Thats what quarterly filings are for =)

      Take care!

  3. Hi ILG,

    As you said, TGT is having really hard time in Canada, I guess TGT made a bad move with Canada expansion.

    I hope they will find a way to attract Canadian customers and bring their business back to the profitable level.

    Even if they failed in Canada, it won’t be a big issue with company because Canadian market is very small compare to U.S,.

    Hope for best,

    • ILG says:

      Hi FJ,

      Thanks for stopping by. I agree that the Canadian market is small, but of all the markets that TGT can start to penetrate I feel that it may be the “easiest”. I will be watching to see how things get turned around there and what lessons they might learn that will help them expand in other countries that are far less similar to the US.

      Take care!