Motley Fool highlights Target’s dividend resilience despite exclusion from top picks

The Motley Fool published an analysis on 27 May 2026 recommending Target (NYSE: TGT) as a dividend growth stock suitable for investors with $1,000 to deploy. The publication highlights the retailer’s status as a Dividend King, noting it has increased its dividend for 54 consecutive years, with the 55th raise expected imminently. At current valuations, the dividend yields 3.6%, a figure described as high relative to peers in the exclusive club of companies with half-a-century of dividend growth.

The recommendation follows a fiscal first quarter ending 2 May 2026, which demonstrated a turnaround in performance. Target reported a 6.7% year-over-year increase in sales and a 5.6% rise in comparable sales. Adjusted earnings per share improved from $1.30 to $1.71, prompting the company to raise its guidance. These metrics suggest progress in stabilising the business after a period marked by supply chain disruptions, overstock issues, and inflationary pressures.

Despite the positive earnings data, The Motley Fool explicitly noted that Target was not included in its Stock Advisor top 10 list of best stocks to buy. The publication contrasted this exclusion with the historical performance of stocks that did make the list, such as Netflix and Nvidia, which generated substantial returns for early investors. The Stock Advisor service has recorded a historical average return of 986%, significantly outperforming the S&P 500’s 208% return over the same period.

Target’s path to its current dividend status has not been without difficulty. The company faced a challenging operational environment characterised by brand resonance issues and macroeconomic headwinds. In response, Target appointed a new CEO earlier this year who outlined a strategic pivot focusing on merchandise assortment improvements, store revitalisation, and technology acceleration. The recent sales and earnings growth indicates these measures are beginning to take effect.

The Motley Fool disclosed that it holds positions in both Target and Walmart, and recommends both stocks. The analysis positions Target as a reliable source of passive income, leveraging its long track record of dividend increases through various economic cycles. However, the exclusion from the top 10 list suggests that while the dividend is attractive, the publication may see greater capital appreciation potential in other holdings within its portfolio.