That’s the case this week with household-name retailer Target (NYSE: TGT).

To get Marc’s take on Target’s dividend, click here.

And to get Anthony’s take on its current valuation, keep reading below.

– James Ogletree, Senior Managing Editor

There’s a strange thing that happens when you become a parent. You start caring about stores you once walked past without a second thought. You know which checkout line is the fastest. You know where everything is. And you know that if you run in for toothpaste, you’ll somehow walk out with a cart full of things you didn’t plan on buying.

That store for many is Target (NYSE: TGT). It’s part of everyday life for millions of families.

But the market doesn’t give out points for mere familiarity. Since early 2024, Target’s stock has slid from above $175 to around $90.

That’s a big drop for a company most of us think of as rock-steady. So the real question is whether this is just a rough patch or a sign of something deeper.

Target reaches nearly 2,000 communities and has become a kind of modern general store. Its same-day pickup and delivery options have turned into a real draw, especially for busy households.

But even a strong brand can’t dodge a strained consumer. Shoppers have tightened up. Traffic is down. Margins are thinner than anyone would like.

The latest quarter reflects that mood. Net sales slipped 1.5% year over year to $25.3 billion. Comparable sales were down 2.7% – mostly because in-store traffic fell – but digital sales grew a bit. Earnings dropped from $1.85 to $1.51 per share, and operating income slid almost 19%.

Still, Target kept returning money to shareholders and now expects full-year earnings between $7.70 and $8.70.

It’s not a disaster. It’s a company pushing through a slow season in the consumer cycle.

When you strip things down to the basics – cash, assets, and consistency – the picture looks clearer.

Target’s enterprise value-to-net asset value ratio sits at 3.74, almost identical to the 3.82 market average. You’re not getting a bargain, but you’re not paying up either.

Where Target still proves itself is in cash generation. Its 6.03% free cash flow-to-NAV rate towers over the 1.12% average. Even in a tough stretch, the company throws off real cash.

Over the last 12 quarters, it grew its free cash flow as often as the typical company in our database.

As you’ve seen, shares have drifted lower for nearly two years and now sit near 2020 levels. Moves like this can tempt bargain hunters, but only when the business is turning a corner.

Target isn’t there yet, honestly. Sales remain soft, margins are still tight, and management is bracing investors for another cautious quarter.

Still, if you shop there often, you know Target hasn’t lost its place in American life.

Good companies sometimes move sideways before they move forward. That’s part of the rhythm of retail. And right now, the market seems to have Target priced about right.

The Value Meter rates Target as “Appropriately Valued.”

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.

The post Target: This Iconic Retail Stock Continues to Miss the Mark appeared first on Wealthy Retirement.

Income investors may have seen B&G come across their radar thanks to the stock’s sky-high 17% dividend yield.

But is that dividend as reliable as a bowl of the company’s Cream of Wheat hot cereal?

We’ll dig into the numbers in just a minute, but first, a word of caution: Anytime you see a dividend yield that high, your guard should be up. It doesn’t automatically mean that the dividend is unsafe or that the stock is a dog, but the risk of both is certainly elevated.

One reason B&G Foods’ yield is so high is that the stock has been a disaster. It’s been just about cut in half in the past year and is down more than 80% over the past five years.

Part of the problem is that cash flow has been very inconsistent.

Last year, it slid 54% from $222 million to $103 million. This year, it is forecast to drop another 10% to $93 million.

The Safety Net model penalizes stocks for declining free cash flow. The reasoning is very simple: You want to see cash flow growth in order to boost your confidence that the company will be able to afford its dividend in the future.

The good news is that B&G’s payout ratio is low enough to not set off any alarms.

Last year, the company paid out 58% of its cash flow in dividends. This year, that number is forecast to remain the same.

In late 2022, B&G Foods slashed its quarterly dividend from $0.475 to the current $0.19. Once a management team has shown a willingness to cut the dividend, the payout is no longer sacrosanct, and investors should be on guard that it could happen again.

The saving grace for the company’s dividend safety rating is that the payout ratio is reasonable. But if cash flow continues to deteriorate, it could become a problem.

B&G Foods’ dividend has a high risk of being cut.

Dividend Safety Rating: D

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.

The post Is B&G Foods’ 17% Yield Delicious… or Dangerous? appeared first on Wealthy Retirement.

However, the stock has not performed well over the past two years. The decline in the share price – plus annual raises in the dividend – means the stock now yields nearly 5%, which is catching the attention of income investors.

Is the dividend as reliable as that box of Cheerios in the pantry, or will it spoil like a pint of raspberries the minute you bring them home from the store?

The company already completed its fiscal 2025 in May. The results weren’t great. Revenue and profits were down, and free cash flow fell 9%. Over the past three years, free cash flow has plummeted from $2.75 billion to $2.29 billion. In fiscal 2026, free cash flow is forecast to slip again to $2.16 billion.

Anytime cash flow is falling, the Safety Net model will penalize the company and lower its dividend safety grade. It’s not a good sign.

General Mills currently pays a $0.61 per share quarterly dividend, which comes out to a 4.9% yield. Last year, the company paid out $1.3 billion in dividends, which was 58% of its free cash flow. That payout ratio is perfectly acceptable. I like payout ratios to be 75% or less of free cash flow. That gives me comfort that the company can continue to pay its dividend even if cash flow falls.

In fiscal 2026, General Mills’ payout ratio is expected to inch up to 62%, which is still fine.

The company has paid dividends every year for 127 years. It has raised its payout to shareholders every year since 2021. It has not cut its dividend in at least 36 years.

However, if free cash flow doesn’t rebound, management could be faced with some difficult decisions.

I don’t suspect a dividend cut is imminent, but with no rebound in sight for free cash flow (it’s projected to decline through at least 2028), there is definite risk to this dividend.

Dividend Safety Rating: D

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.

The post General Mills: How Safe Is This Beloved Company’s Dividend? appeared first on Wealthy Retirement.

While the gravy train may have stopped for Buchanan’s girlfriend, Kohl’s investors are hoping to continue getting the company’s solid dividend.

But can interim CEO Michael Bender sustain the big 7.6% yield?

The stock has been falling since 2018, which is why the dividend yield is so high.

Over the past few years, Kohl’s free cash flow has gone up and down almost as much as a Knicks fan’s emotions while watching the NBA playoffs.

In fiscal 2024, which ended in February, free cash flow dropped from $591 million to $182 million. In 2022, it was negative. Free cash flow for the current fiscal year is forecast to rise to $393 million.

In fiscal 2024, Kohl’s paid shareholders $222 million in dividends. That came out to a 122% payout ratio, which is way too high. In other words, it paid shareholders $1.22 for every $1 in free cash flow. That is not sustainable.

However, because free cash flow is forecast to rise to $393 million this year, the payout ratio is projected to drop to a more comfortable 61%, as the total dividend payout is expected to rise only slightly to $238 million.

As for Kohl’s dividend history, it is like former CEO Ashley Buchanan’s judgment.

Not good.

Kohl’s slashed its dividend from $0.50 per share to $0.125 earlier this year. During the pandemic, it eliminated the payout entirely for three quarters. When it brought it back, the dividend was 65% lower than before it was suspended.

So Kohl’s dividend safety rating has a lot of things going against it: The company’s free cash flow fell in the most recent fiscal year, its payout ratio is sky-high, and it is a frequent dividend cutter.

Kohl’s is facing tariffs and a new CEO taking over after a scandal. With all the marks against its record, its dividend cannot be considered safe.

Dividend Safety Rating: F

What stock’s dividend safety would you like me to analyze next? Leave the ticker in the comments section.

You can also take a look to see whether we’ve written about your favorite stock recently. Just click on the word “Search” at the top right part of the Wealthy Retirement homepage, type in the company name, and hit “Enter.”

Also, keep in mind that Safety Net can analyze only individual stocks, not exchange-traded funds, mutual funds, or closed-end funds.

The post Can Kohl’s 7% Yield Survive a CEO Scandal? appeared first on Wealthy Retirement.

The department store giant, which operates Macy’s, Bloomingdale’s, and Bluemercury stores nationwide, has seen its stock price bounce between $10 and $20 over the past year as it’s worked to reinvent itself for the modern shopper.

Let’s dig into the numbers to see whether (with apologies to Bob Barker) the price is right.

At first glance, Macy’s might look cheap – much like the clothing rack in its stores’ “Last Act” clearance section. Its enterprise value-to-net asset value (EV/NAV) ratio is 2.27, well below the average of 6.35 for companies with positive net assets. Put another way, you could theoretically buy all of Macy’s assets at a significant discount to what similar companies are worth.

However, there’s a reason for the steep discount: The company has posted negative free cash flow in three of the past four quarters.

When it does generate cash, though, it performs better than you might expect. Over the past four quarters, its quarterly free cash flow has averaged 4.01% of its net assets, compared with -9.05% for companies with similar cash flow patterns.

The numbers from Macy’s most recent quarter help add context to these figures. While sales dropped 3.8% to $4.9 billion, the company managed to expand its gross margin to 40.5%, up from 38.1% last year. That tells us that even though it’s selling less overall, it’s making more money on what it sells.

What’s driving this improvement? The company’s “Bold New Chapter” strategy seems to be gaining traction. Its “First 50” locations – test stores with enhanced staffing and merchandising – posted their second straight positive quarter, with comparable sales rising 1%. This success led management to expand some of these initiatives to 100 more stores.

Meanwhile, Macy’s luxury segments are holding steady, with Bloomingdale’s sales down just 0.2% year over year and Bluemercury’s actually growing 1.7%.

The company is also smartly monetizing underperforming locations, as it expects to close about 55 stores this year. This isn’t just cost-cutting – it’s value creation. These locations may be weak performers as stores, but they’re valuable real estate assets. Management noted strong demand from developers for these properties, and they’re only executing deals that would build shareholder value. In fact, asset sales totaled $36 million in Q2 alone.

Lastly, though Macy’s carries $3 billion in long-term debt on its balance sheet, it has maintained a healthy cash position of $646 million.

So what’s the bottom line?

While Macy’s low EV/NAV ratio might make it look like a bargain, the company’s mixed cash flow performance and ongoing transformation suggest that its current valuation is appropriate.

It’s making the right moves with its store strategy and maintaining solid margins, but it’s also still navigating a challenging retail environment.

The stock isn’t cheap enough to be a clear bargain, but it’s not expensive either – especially given the company’s still-solid market position and the progress it’s making on its turnaround strategy.

Sometimes the market gets it right, and this appears to be one of those times.

For now, The Value Meter rates Macy’s as “Appropriately Valued.”

What stock would you like me to run through The Value Meter next? Post the ticker symbol(s) in the comments section below.

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