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Target Declares Share Buyback Plan: What Else You Should Know

By Zacks Investment ResearchSep 19, 2019 09:50PM ET
www.investing.com/analysis/target-declares-share-buyback-plan-what-else-you-should-know-200466591
Target Declares Share Buyback Plan: What Else You Should Know
By Zacks Investment Research   |  Sep 19, 2019 09:50PM ET
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In an attempt to boost shareholder value, Target Corporation’s (NYSE:TGT) board of directors authorized a new repurchase program worth up to $5 billion. The company will initiate repurchasing of shares under the new program, upon completing the existing $5 billion buyback plan, which is likely to take place in fiscal 2020. At its last earnings call, Target notified that it still had approximately $1 billion remaining under its current authorization.

In addition, Target declared a quarterly dividend of 66 cents per share. The dividend is payable on Dec 10, 2019 to shareholders of record as on Nov 20, 2019.

We appreciate Target’s efforts to consistently enhance long-term shareholder value. The company’s healthy cash flow generation capability and efficient capital allocation provides it with ample liquidity to return excess cash to its shareholders. During the second quarter of fiscal 2019, Target repurchased shares worth $341 million and paid out dividends of $328 million.

Notably, the company hiked its quarterly dividend by 3.1% in June 2019. People looking for regular income from stocks are most likely to choose companies that have a track record of consistent and incremental dividend payouts.

Things You Ought to Know

Stock Displays Solid Momentum in Six Months

Target’s growth strategies and sound fundamentals reinforce its position in the fast-changing retail landscape. Notably, shares of this Zacks Rank #2 (Buy) company have advanced around 36% in the past six months against the industry’s rise of 22.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has also comfortably outperformed the Retail-Wholesale sector and the S&P 500 Index that advanced 5.4% and 3.7%, respectively, in the said time frame. Further, the stock is hovering close to its 52-week high of $110.94.



Strategic Endeavors to Further Drive the Momentum

Target is deploying resources to enhance omni-channel capacities, come up with new brands, remodel or refurbish stores, and expand same-day delivery options. Also, the company has adopted cost reduction strategy, rationalization of supply chain with same-day delivery of in-store purchases and technology and process improvements.

From quite some time, Target has been investing in groceries in the wake of rising competition from retailers such as Amazon (NASDAQ:AMZN) , Kroger (NYSE:KR) and Walmart (NYSE:WMT) . The company launched a new food brand, Good & Gather. Prior to this, it has launched private-label brands namely Everspring, Auden, Colsie and Cloud Island Essentials.

Moreover, it has added same-day delivery options and undertaken steps to augment supply chain. It is deploying resources for technology and process improvements. Further, it is going to launch a new loyalty program — Target Circle — nationwide on Oct 6, 2019. Courtesy of this program, customers can avail more convenient and customized shopping experiences in the upcoming holiday season.

Wrapping Up

Retail is no more restricted to brick-&-mortar and the scenario has drastically changed with the advancement of technology and digital transformation, which have altered consumer shopping. In fact, Target has taken steps that have improved prospects in a big way.

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Amazon.com, Inc. (AMZN): Free Stock Analysis Report

Walmart Inc. (WMT): Free Stock Analysis Report

Target Corporation (TGT): Free Stock Analysis Report

The Kroger Co. (KR): Free Stock Analysis Report

Original post

Zacks Investment Research
Target Declares Share Buyback Plan: What Else You Should Know
 
Target Declares Share Buyback Plan: What Else You Should Know

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