Target: Next Stock Purchase For The Dividend Yield Passive Income Portfolio

I bought 20 shares of the discount store operator Target. The company yields at 2.41 percent and is priced with a P/E of 16.77. Due to growth, the forward P/E should sink to 13.10. Over the next five years, earnings are expected to grow by 11.06 percent yearly. That’s a good value and the price is fair in my view. The stock is down 1.5 percent last week.

The full stake cost me $1,434.20 in total and would bring me around $35 Bucks in dividend income, based on $1.72 estimated yearly dividends. Target operates in three segments: U.S. Retail, U.S. Credit Card and Canadian. As a component of the U.S. Retail Segment, its online presence is designed to enable guests to purchase products either online or by locating them in one of its stores with the aid of online research and location tools.

Latest Portfolio Transactions (Click to enlarge)

Dividend Yield Passive Income Portfolio I (Click to enlarge)

Dividend Yield Passive Income Portfolio II (Click to enlarge)

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For readers who a new to the matter and my dividend growth philosophy: I funded a virtual portfolio with 100k on October 04, 2012 with the aim to build a passive income stream that doubles each five to ten years. I plan to purchase each week one stock holding until the money is fully invested. The total number of constituents is expected at 50 – 70 companies and the dividend income should be at least at $3,000 per year.

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Target is the second biggest capital market listed company from the discount and variety store industry, behind Costco Wholesale. COST as a USD 5 Billion bigger market capitalization but sells more items for around USD 30 billion per year. Costco has a smaller margin; it offers larger discounts and has a 12.5 percent gross margin. Target’s gross margin is at 30.80.

Target is a real Dividend Champion. The company raised its dividend payments over a period of 46 consecutive years. Its dividend growth accelerated from 18.6 percent over the recent 10 years to 24.7 percent for the past 3 Years. The latest dividend hike was at 20% from 30 Cents to 36 Cents on August 13, 2012.

Earnings and Dividends of Target

As of the time of writing, the stockholdings from the portfolio gained 9.13% since the date of funding. It’s a small underperformance compared to the broad market and a result of the slow purchasing process. I buy only one company each week for around 1k to 2k. In markets that are going strongly up, the strategy will produce an underperformance. My aim is not to show how make fast profits by trading stocks. I like to create a sustainable long-term dividend growth portfolio. I plan to boost the current income to 3k or more by the end of the year. Over the next ten years, this value should double to 6k or more.

Portfolio Performance (Click to enlarge)

With still $40,022.60 in cash, it’s a solid basis for further stock acquisitions. I’m quite confident to realize my current goals.

Here is the income perspective of the portfolio

Sym	Name	P/E Ratio	Dividend Yield		Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	16.79	3.65		28.90	50	$64.50	$1,765.50
LMT	Lockheed Martin C	13.8	3.72		92.72	20	$89.00	$2,400.00
INTC	Intel Corporation	12.46	3.9		21.27	50	$45.00	$1,163.00
MCD	McDonald's Corpor	18.08	3.09		87.33	15	$45.15	$1,470.45
WU	Western Union Com	10.32	2.77		11.95	100	$47.50	$1,696.00
PM	Philip Morris Int	17.33	3.85		85.42	20	$68.78	$1,777.60
JNJ	Johnson & Johnson	20.55	2.69		69.19	20	$49.80	$1,856.60
MO	Altria Group Inc	16.62	4.9		33.48	40	$70.40	$1,436.00
SYY	Sysco Corporation	20.08	3.21		31.65	40	$44.40	$1,390.80
DRI	Darden Restaurant	15.44	4.24		46.66	30	$61.50	$1,467.90
CA	CA Inc.	14.36	3.36		21.86	50	$50.00	$1,484.00
PG	Procter & Gamble	18.02	2.9		68.72	25	$58.20	$2,009.75
KRFT	Kraft Foods Group	21.13	3.54		44.41	40	$80.00	$2,258.00
MAT	Mattel Inc.	19.03	3.16		36.45	40	$53.60	$1,710.80
PEP	Pepsico Inc. Com	21.92	2.55		70.88	20	$43.60	$1,706.20
KMB	Kimberly-Clark Co	21.42	3.15		86.82	15	$46.50	$1,475.85
COP	ConocoPhillips Co	10.67	4.06		61.06	20	$52.80	$1,314.40
GIS	General Mills In	18.43	2.66		42.13	30	$41.10	$1,545.30
UL	Unilever PLC Comm	20.68	3.11		39.65	35	$44.91	$1,419.95
NSRGY	NESTLE SA REG SHR	18.99	3.22		68.69	30	$65.31	$2,007.00
GE	General Electric	18.28	3.1		23.39	65	$48.10	$1,602.25
ADP	Automatic Data Pr	24.55	2.36		61.65	25	$42.50	$1,812.00
K	Kellogg Company C	26.31	2.63		61.52	25	$44.00	$1,674.50
KO	Coca-Cola Company	21.51	2.62		38.83	40	$42.80	$1,625.60
RTN	Raytheon Company	12.23	3.01		57.04	20	$42.00	$1,400.20
RCI	Rogers Communicat	11.74	4.13		51.06	50	$83.30	$2,015.00
GPC	Genuine Parts Com	18.45	2.52		77.06	20	$41.28	$1,642.00
TSCDY	TESCO PLC SPONS A	226.67	4.05		17.98	110	$75.68	$1,855.70
APD	Air Products and	19.19	2.52		85.71	15	$40.50	$1,561.80
GSK	GlaxoSmithKline P	18.95	4.52		52.16	30	$70.38	$1,545.00
WMT	Wal-Mart Stores	15.37	2.23		79.25	20	$34.72	$1,560.00
BTI	British American	16.77	3.9		114.6	23	$95.22	$2,443.29
CHL	China Mobile Limi	10.54	4.11		55.32	25	$54.95	$1,334.50
MMM	3M Company Common	18.38	2.1		110.27	15	$36.75	$1,753.65
TUP	Tupperware Brands	24.08	2.36		80.98	15	$29.40	$1,247.25
IBM	International Bus	14.01	1.77		206.35	8	$28.00	$1,578.80
HAS	Hasbro Inc.	18.68	3.14		44.09	30	$44.40	$1,412.40
T	AT&T Inc.	27.42	5.05		34.47	30	$53.70	$1,068.00
WAG	Walgreen Co. Comm	22.31	2.16		44.25	30	$33.00	$1,524.60
AFL	AFLAC Incorporate	9.55	2.28		59.39	20	$27.60	$1,221.80
TGT	Target Corporatio	16.88	2.01		71.46	20	$28.80	$1,429.20
							$2,119.13	$66,662.64
							Average Yield	3.18%
							Yield On Cost	3.46%