Investors looking to maximize their returns in the new year are zeroing in on dividend stocks, and two standouts—Target and Verizon Communications—are catching the eye. While the broader S&P 500 index continues its climb, these stocks offer something many others can’t: strong, stable dividends and solid long-term growth potential.
Target: A Resilient Retailer with Long-Standing Dividends
Target has weathered economic ups and downs with surprising resilience. The retail giant, which operates nearly 2,000 stores and boasts $107 billion in annual revenue, has been rewarding shareholders since 1967 with consistent dividend payouts.
Recent financials highlight both challenges and opportunities:
- Target reported a modest 0.3% increase in comparable sales last quarter.
- Traffic to its stores rose 2.4%, even as consumer spending remained subdued.
- The company’s forward price-to-earnings (P/E) ratio sits at an attractive 16, offering better value compared to competitors like Walmart and Costco.
While its quarterly dividend payment of $1.12 might not seem groundbreaking, it’s a testament to Target’s commitment to shareholder returns. This payout represents just 52% of the company’s earnings, leaving ample room for growth in the years ahead.
What sets Target apart? Its innovative same-day delivery program, which continues to attract new customers, could become a critical driver of future sales. Once consumer spending rebounds, analysts expect Target to enjoy both revenue growth and a higher valuation multiple.
Key Metrics for Target:
| Metric | Value |
|---|---|
| Dividend Yield | 3.24% |
| Market Cap | $65 billion |
| Current Price | $141.62 |
| 52-Week Range | $120.21 – $181.86 |
If you’re an investor seeking a balance of income and growth, Target’s combination of affordability and dependable dividends makes it a compelling choice.
Verizon Communications: A High-Yield Telecom Giant
For those drawn to the stability of the telecom sector, Verizon Communications offers an impressive dividend yield of 6.99%. With its roots in providing essential services like wireless and broadband connectivity, Verizon generates reliable cash flow—a lifeline for dividend investors.
Even amid broader economic challenges, Verizon has maintained its dividend streak since 1984, underscoring its commitment to shareholder value. The company recently raised its quarterly payout to $0.6775, reflecting a modest 1.8% increase.
Recent Highlights:
- Wireless Service Revenue Growth: Verizon posted a 2.7% increase year-over-year in wireless service revenue during Q3 2024.
- Subscriber Additions: It gained 239,000 postpaid phone subscribers and achieved its ninth consecutive quarter with 375,000+ broadband net additions.
- Innovative Offerings: Products like “myPlan” and “myHome” are gaining traction with consumers, further stabilizing revenue streams.
While the stock has seen a 28% decline over the last three years, much of this is tied to investor concerns over rising interest rates and potential economic slowdowns. However, Verizon’s payout ratio of just 58% ensures the company has room to continue its dividend growth even if subscriber growth moderates.
Is Verizon undervalued? Many analysts think so. With most downside risks already baked into its share price, this stock offers both high income potential and a margin of safety for cautious investors.
Verizon by the Numbers:
| Metric | Value |
|---|---|
| Dividend Yield | 6.99% |
| Market Cap | $159 billion |
| Current Price | $37.81 |
| 52-Week Range | $37.59 – $45.36 |
Verizon may not deliver the kind of high-growth returns seen in tech stocks, but for those prioritizing steady income, it remains a top pick.
The Bigger Picture
The S&P 500’s strong performance over the last year has pushed its average dividend yield to a historic low of 1.24%. For income-focused investors, this makes Target and Verizon particularly attractive. With yields of 3.24% and 6.99%, respectively, these stocks offer far better returns than the index average, all while maintaining solid fundamentals.
In an investment world dominated by fleeting trends and speculative plays, the reliability of these dividend giants stands out. Whether you’re looking to boost passive income or diversify your portfolio, Target and Verizon provide compelling reasons to invest in 2025.
