I uncover a high-quality dividend growth stock that appears to be undervalued each week for Daily Trade Alert, which is a site that focuses on dividend growth investing, stocks, and unique investment opportunities. I’ve been writing for them for years now, and they’re just great over there. Each week, I publish an excerpt of my work, when it’s fresh off the press. That way, you readers are given the opportunity to check it out. The content is totally free. I hope you enjoy!
I’m the kind of person who doesn’t really live with regret.
I don’t ever think back on mistakes I made, wishing I would have done things differently.
Instead, I simply try to learn from my mistakes. I then use those experiences to my advantage, becoming a better and smarter version of myself.
But I can say for sure one of the biggest mistakes I ever made in my life was waiting until I was in my late 20s before I started aggressively saving and investing.
If I had started back when I was, say, 20 years old, I probably would have been financially independent before I turned 30.
However, the effects of compounding are so powerful that they overcame my prior mistakes.
Image courtesy of: Stuart Miles at FreeDigitalPhotos.net.
How would you compare Target to Walmart with regard to being able to compete with the likes of Amazon?
Howard,
Walmart has scale; Target has cachet. But both are general retailers, and people generally don’t discriminate when it comes to general merchandise. They’ll go where they can get the most convenience at the lowest price, which is how Walmart became so dominant in the first place. As such, I think both are under threat.
Cheers!
Thank you, Jason.
Considering the threat from Amazon, why do you feel comfortable buying Traget ( and ? Walmart)
Regards,
Howard
Howard,
I no longer own Walmart. As for Target, I lightened up on my position in the $80s due to valuation, position size, and overall business concerns. It’s now a more appropriately-sized position for me and my goals. As for why someone would want to consider Target, I laid that out in the article. It would make no sense for me to repeat myself. So it’s really up to you to do your due diligence and decide whether or not the business makes sense as an investment for you and your goals.
Cheers!
Target price matches Amazon. I can find most of what I want at Target and the cashier will always give me the best price if I bring up the same item on my phone.
Brian,
Nice! I’ll have to use that trick next time I’m over at Target. 🙂
Best regards.
I’m not a big fan of Target, I don’t care for the volatility there. It seems more of a two horse race with WMT and AMZN and Target a distant third. I see a lot of investors flocking to it though, investors who are probably much smarter than me so I could be totally wrong but I’m just not comfortable with it.
CD,
Yeah, I hear you. Retail as a whole is super tough, but I think the general retailers without any kind of branded products/experiences are in even worse shape, as people will simply buy where it’s most convenient and affordable. If you can provide a superior experience for a lower price, you’ve won customers. And Amazon is more or less beating the competition there, including both Walmart and Target, which is why the numbers prove out as they do. All in all, I’m glad to have much lower exposure to some of these retail names (after selling out of WMT and lightening up on TGT a little while ago), but I think the valuation for TGT is, perhaps, worth a look for the right investor(s).
Thanks for dropping by!
Cheers.
I bought some at around $55 and averaged down today at $53. I now own 30 shared at a CB of $54.45. Not a big position, as I dislike retail in general and it is a bit risky, but I think the concerns are overblown. The growth is not going to be stellar, and they need to do better online, but I think it has overcorrected and will mean revert to a higher multiple later, so there is that to add back into total return if it happens. Meanwhile, I collect a fat dividend with a reasonable payout ratio and a 46 year history of increases. I think they can still keep raising in the near term even with some headwinds. I think anything below $55 is fairly valued. Not much is fairly valued these days with such a high yield. May not hold long term, and won’t make it a large position, but it is worth a nibble here.
Daniel,
I’m in the same spot there in regard to it not being a large position. I owned 70 shares at one point, but lightened up when the stock was in the low $80s. In all honesty, I was thinking about dropping down to 30 or 40 shares instead, but it wouldn’t have made much of a difference anyway.
Nonetheless, the valuation is pretty strong here, assuming they can continue to grow the dividend at a very modest rate. If the dividend grows slower than projected, or not at all, the valuation obviously drops. So we’ll just have to see what they’re capable of within the new framework of the heavy reinvestment into the business, stores, and omnichannel capacity.
Thanks for dropping by!
Best regards.