The Target board of directors demonstrated its faith in the company’s cash generating capabilities on Wednesday and agreed to up the company’s quarterly dividend 19% to 43 cents a share.
The hefty increase ups the annual payout to $1.72 and moves the company closer to a long-term commitment to increase the full-year dividend amount to $3 by 2017. In addition, the company has established a target of growing earnings per share to $8 over the same time frame, up from $4.26 last year.
The dividend increase was announced in advance of the company’s shareholders’ meeting held Wednesday at a Target store located at 7777 East Hampden Avenue in Denver.
Target chairman, president and CEO Gregg Steinhafel said the company’s strategic clarity and powerful brand would help it deliver results going forward and the REDcard Rewards program, which currently stands at a 17.1% penetration rate, would allow the company to promote loyalty.
Steinhafel added that the company would take smart risks, pursue bold and innovative ideas and continue to raise the bar on differentiation.