2023 has been a strong year for stocks so far. Even if the market flattens out from here, it will still be a much better year than 2022. Those looking to buy today won’t get the extreme lows from last October or December for most stocks.
Rather than pile into stocks that have done well, investors may do better by focusing on income stocks rather than growth stocks for the time being. Fortunately, many companies have continued to grow their dividends.
One relatively high-yielding company is retailer Target (TGT). At their lows, shares were nearly cut in half from their all-time highs. And shares are still down 26 percent over the past year. Yet the company grew its dividend payment, which is about 2.7 percent today.
Chances are they’ll announce a further increase coming up in June. If so, long-term investors could get in ahead of that likely increase. With a prior annual dividend jump of about 9 percent, patient investors who buy now could see great returns.
Action to take: Target is reasonably valued at 18 times earnings, and the retailer has held up well with a slight increase in revenue over the last year even as consumers have started to slow down. Add in the dividend and potential growth there, and shareholders could see solid results.
For traders, shares have been somewhat rangebound for nearly a year, but are trending higher. The September $175 calls, last going for about $5.70, could see a mid-double-digit gain rally or better in the coming months before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.