The Ultimate Dividend Growth Stock to Buy With $1,000 Right Now

You don't have to look too far to find excellent dividend stocks. In fact, some of the very best dividend payouts come from companies that you may use on a daily basis.

While many top growth stocks might be obscure, the best dividend stocks are excellent precisely because they have a long track record of growth that you can't ignore.

However, you might be surprised to hear what I think is the ultimate dividend growth stock. This is a company you may interact with frequently and not realize has such a compelling dividend. The company I speak of is Target (NYSE: TGT), and here's why it might be perfect for you if you're looking for a top dividend stock and have $1,000 to spend.

Image source: Target.

All about the dividend

Target is a Dividend King, which means that it's been paying and raising its dividend for at least 50 years consecutively. Dividend Kings have been through pretty much every kind of economy and catastrophe, including global wars, hyperinflation, and pandemics, and they haven't skipped a dividend raise beat. That's reliability you can count on if you're expecting a check in the mail.

Target joined the club fairly recently, having raised its dividend for the 54th time last June. That means in a few weeks, it will have 55 years of dividend raises under all kinds of circumstances.

At the current price, Target's dividend yields 3.6%, which is very high for a Dividend King. Dividend Kings provide value in their reliability and growth, not necessarily their yields. Target's dividend has also grown faster than those of many other excellent dividend stocks, like Coca-Cola, Procter & Gamble, and Walmart.

KO Dividend data by YCharts

All about the stock

Speaking about raising the dividend under all kinds of conditions, including adverse ones, Target has been in a tough place for a few years. What began with supply issues and overstock has turned into inflationary pressure, political messes, and a brand that's not resonating.

The company got a new CEO this year, and he outlined a new growth strategy to combat these issues. It focuses on improving the merchandise assortment, revitalizing stores, and accelerating new technology.

So far, Target is demonstrating progress in its recovery. It reported a 6.7% year-over-year increase in sales in the 2026 fiscal first quarter (ended May 2) and a 5.6% increase in comparable sales. Adjusted earnings per share increased from $1.30 to $1.71, and the company raised guidance.

As Target continues its turnaround, you can rely on excellent, reliable, and growing passive income.

Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Target and Walmart. The Motley Fool has a disclosure policy.