This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Target Loses Its 'Mr. Sam'

NEW YORK ( TheStreet) -- Much of the mythology around Wal-Mart (WMT) comes from its legendary founder, Sam Walton.

The same is true for rival Target (TGT - Get Report) and Douglas Dayton, who died Saturday at 88.

Like Walton, Dayton passed his company on to younger men long before he passed. Dayton was the youngest of five brothers, one of whom, Bruce, is still with us at 94. Dayton called Target "the best job I ever had," and headed the unit that built the first four stores. According to his Minneapolis Star-Tribune obituary, he also got a kick out of customers calling it "Tar-zhay," French-ifying it.

Dayton was brought back into the parent company in 1968 to help run the Dayton-Hudson Stores, a traditional department store -- many of its stores are now part of Macy's (M). He retired from the company in 1974 and retired from business in 1994.

But Dayton brother values continue to shape Target just as Walton's shape Wal-Mart. Target is Midwest-focused, heavily philanthropic and accused of being liberal. Current Minnesota governor Mark Dayton, a Democrat, is a nephew of Douglas Dayton.

Walton's values were more southern, more conservative and more entrepreneurial. While Dayton built his business from inside an old-line department store, Walton built his business from scratch. Walton's children remain big contributors to conservative causes.

But which is a better investment?

The answer may surprise you. If you were in Wal-Mart during its go-go days, you're rich. The company's value has expanded nearly 100,000% since it came public in the 1970s, and one of the favorite company legends is of ordinary employees who became millionaires off their stock.

But over the last 10 years, Wal-Mart's growth has slowed, and Target has been the better bet. Target stock is up 88% over the last 10 years, 50% over the last five, 21% over the last one year. It recently gave shareholders another bump in the dividend, to 43 cents, and now yields 2.45%. That's close to Wal-Mart's 2.5% yield.

Much of the problem is due to the law of large numbers. Wal-Mart is nearly 10 times bigger than Target by revenue, so while its growth rate is slower it actually increased sales by $23 billion over the last year against Target's increase of under $2.5 billion.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
TGT $80.04 -0.32%
AAPL $131.78 -0.20%
FB $80.20 -0.43%
GOOG $539.78 -0.00%
TSLA $251.45 1.62%

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.79 -2.69 -0.13%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs