Head to Head Review: Target (TGT) versus The Competition

Target (NYSE:TGT – Get Free Report) is one of 149 public companies in the “Consumer Staples Distribution & Retail” industry, but how does it contrast to its peers? We will compare Target to similar companies based on the strength of its dividends, institutional ownership, profitability, analyst recommendations, risk, valuation and earnings.

Analyst Ratings

This is a summary of recent recommendations and price targets for Target and its peers, as provided by MarketBeat.com.

Target presently has a consensus target price of $161.50, suggesting a potential downside of 2.11%. As a group, “Consumer Staples Distribution & Retail” companies have a potential upside of 59.03%. Given Target’s peers stronger consensus rating and higher probable upside, analysts clearly believe Target has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares Target and its peers top-line revenue, earnings per share (EPS) and valuation.

Target has higher revenue and earnings than its peers. Target is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Target pays an annual dividend of $4.64 per share and has a dividend yield of 2.8%. Target pays out 48.2% of its earnings in the form of a dividend. As a group, “Consumer Staples Distribution & Retail” companies pay a dividend yield of 3.8% and pay out 37.2% of their earnings in the form of a dividend. Target has increased its dividend for 54 consecutive years. Target lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Risk & Volatility

Target has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, Target’s peers have a beta of 0.44, indicating that their average share price is 56% less volatile than the S&P 500.

Profitability

This table compares Target and its peers’ net margins, return on equity and return on assets.

Institutional and Insider Ownership

79.7% of Target shares are owned by institutional investors. Comparatively, 45.0% of shares of all “Consumer Staples Distribution & Retail” companies are owned by institutional investors. 0.1% of Target shares are owned by insiders. Comparatively, 19.7% of shares of all “Consumer Staples Distribution & Retail” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Target beats its peers on 8 of the 15 factors compared.

Target Company Profile

(Get Free Report)

Target Corporation operates as a general merchandise retailer in the United States. The company offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes; and beauty and personal care, baby gear, cleaning, paper products, and pet supplies. It also provides dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service; electronics, which includes video game hardware and software, toys, entertainment, sporting goods, and luggage; and furniture, lighting, storage, kitchenware, small appliances, home decor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise. In addition, the company sells merchandise through periodic design and creative partnerships, and shop-in-shop experience; and in-store amenities. Further, it sells its products through its stores; and digital channels, including Target.com. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.