27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Target (NYSE: TGT) announced Wednesday that it was boosting its quarterly dividend 19.4 percent. Target announced that it will pay its next quarterly dividend in September.
Dividend Growth
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The company has grown its dividend at a regular rate in recent years in an effort to keep the yield fairly constant. Wednesday, Target boosted the quarterly dividend to $0.43 for the quarter, as expected by Bloomberg forecasts. The dividend brings the annual yield to about 3.09 percent.
Target boosted its dividend around the same time last year to $0.36 from $0.30 per quarter. The company may be setting a precedent for timely dividend hikes so long as business remains strong. The company also highlighted that the dividend will mark the 184th consecutive dividend since the company went public in 1967.
Payout Boost
The boosted dividend increases the payout ratio of the stock immediately. The company is now paying out just over 40 percent of its earnings as dividends compared to 33 percent prior.
The boost in the dividend also serves to mitigate the impact of rising earnings on the payout ratio. The company seems to want to pay out just over 30 percent of earnings as dividends. Since earnings are expected to grow from $4.36 this year to $5.46 next year, the dividend raise keeps the payout ratio in this range.
Share Reaction
Target shares were largely unchanged on the news. Shares remained lower after the announcement and spiked lower at first on the news before recovering to where they were before the release. Target shares did open higher on the day but have traded lower throughout the day rather consistently.
Tomorrow's retail sales report will be key for the stock. Retail sales are expected to have risen 0.4 percent in May vs. a 0.1 percent gain in April.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.