Meet the High-Yield Dividend King That Just Boosted Its Payout For the 55th Consecutive Year. Here's Why It's Still a Buy at a 52-Week High.

Sammy Hagar couldn't drive 55, but Target (NYSE: TGT) was able to last week. The discount retailer has now boosted its quarterly distributions for 55 consecutive years, coming through with another dividend increase. The move was modest -- up less than 2% to a quarterly rate of $1.16 a share -- but it kept an enviable streak going for the Dividend King.

It also helped keep the upticks coming, as Target hit a 52-week high on Friday. But the stock is still a good buy despite the fresh peak. With a turnaround coming together, this could be a great time to buy the ascending 2026 market beater.

Let's go on a shopping spree.

Image source: Getty Images.

Target practice

Target stock has been cheap for some time. Now that the chain is becoming chic again in investing circles, the "cheap chic" discount retailer is ready for the spotlight. A new CEO's arrival in February hasn't delivered immediate financial results, and the company is targeting modest net sales growth of 2% for the full year, but investors are willing to wait things out. There is resounding market confidence in the new approach.

Target stock has soared 38% so far in 2026. It's one of just seven S&P 500 stocks yielding more than 3% that have gained more than 30% this year. CEO Michael Fiddelke has laid out an aggressive plan to restore Target and its customer appeal to what they were in better times, and that's why, even though Target closed out last week at a fresh recent high, it's worth recalling that the stock still stands at roughly half of its 2021 all-time high.

Into the playbook

The stakes are high, with the stock at a 52-week high. Fiddelke has communicated a clear vision for making "Tar-zhay" cool again, but it won't come cheap. Target announced in March that it will commit an incremental $2 billion in spending this year. Half ot that will go toward capital expenditures, with the other bankrolling additional operating investments to accelerate store-level sales growth.

Target isn't just going back to the past. It's not afraid of the future. It's leaning on AI to provide a more intuitive and personalized shopping experience. The mass-market department store operator is transforming its floor plans and displays. And it's not going to be afraid to ramp up payroll if it has to spend money to make money in the future.

Target is part of the elite group of Dividend Kings -- companies that have increased their payouts for at least 50 straight years. But the stock is no longer just about the consistent dividend. That story was reinforced with last week's increase. And it's worth noting that the stock's rise this year has lowered the yield from roughly 5% at the start of the year to 3.4% today.

Still, Target shares aren't expensive despite the year-to-date climb. You're buying the chain for 16 times forward earnings and 15 times next year's profit target. That's a fair price for a turnaround story that's just starting to be told.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.