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Wal-Mart's biggest competitor is another potential dividend hiker for the quarter ahead.
Target (TGT - Get Report) is another big box retailer with big scale, just not as big as the footprint at "Wally World": Target runs around 1,800 stores spread across North America, and generates more than $73 billion in annual sales. As I write, Target's dividend yield sits at 2.08%; now the firm looks due for a dividend hike.
Target has found considerable success in carving out a niche very separate from WMT's. The firm was one of the first to team up with exclusive designers and market form over cost in a big box setting -- and it's a strategy that's paid off in putting the firm slightly more upscale than its biggest rival. In the last few years, the introduction of grocery offerings as a traffic driver (grocery is certainly not a profit driver) has been an effective growth tool. With the firm's PFresh initiative in place, the firm is likely to see some margin contraction, but it'll also see bigger profits on an absolute scale.
Financially, Target is in good shape, with plenty of liquidity and untapped credit available on the firm's balance sheet. That leaves the firm in a good position to hike the 36-cent payout that investors have been receiving for the last four quarters.
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