In This Article:
No matter what the general market is doing, dividend stocks are great to have in your portfolio. But in difficult or uncertain times -- such as right now -- these players make particularly interesting additions. For two reasons. First, a dividend stock limits your losses during market turmoil by offering you a regular payment that you can count on, even if that particular stock has delivered a poor performance.
And second, during market declines, many of these top stocks could be picked up for a bargain -- so you buy the dividend player for a low price and go on to benefit year after year from passive income and potentially from the stock's recovery and growth over time. So, right now, amid concern about the potential impact of President Trump's tariffs on imports, it's a great idea to add a dividend stock or two to your portfolio.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
One in particular offers investors a fantastic opportunity. This magnificent S&P 500 index company has seen its stock drop 60% over the past three years, but it's well positioned for a rebound and long-term growth. Let's check out this top dividend stock to buy and hold forever.
A commitment to dividends
This particular company has proved its commitment to paying out dividends, recently announcing its 231st straight quarterly dividend payout since 1967, when the company went public. I'm talking about retail giant Target (NYSE: TGT). Not only has Target been paying dividends consistently since that time, but the company also has built a track record of increasing payments year after year.
Target is a Dividend King, meaning it's lifted its dividend for at least the past 50 years. This is positive because it shows the company truly is committed to rewarding shareholders -- and that suggests it's likely to stick with this policy. On top of this, Target generates billions of dollars in free cash flow, meaning it's able to support dividend growth.
The retailer pays an annual dividend of $4.48, representing a yield of 4.7%, far surpassing the 1.2% dividend yield of the S&P 500. And, finally, it's important to remember that such a strong dividend track record also suggests a certain solidity of the dividend-paying company -- in this case, Target. So, it's clear that this retail stock makes a great buy to boost your passive income.
Target's business over time
Now here's more good news: You'll also like Target for the wonderful business it's built over the years and the potential for more growth ahead. It's true that in recent years, the company has struggled with certain challenges -- such as inventory shrink due to theft in its stores and tougher economic times that have weighed on customers' buying power -- and this has hurt revenue growth.