The business behind the dividend
| Measure | TGT | Median | Formula |
|---|---|---|---|
| Return on equity | 22.9% | 11.7% | Net income ÷ shareholders’ equity |
| Return on capital employed | 16.7% | 10.1% | Operating income ÷ (equity + total debt) |
| Owner earnings | $3.11bn | $632.00m | Net income + depreciation & amortisation − capital expenditure |
| Free cash flow | $2.83bn | $746.10m | Operating cash flow − capital expenditure |
| Operating margin | 4.9% | 15.0% | Operating income ÷ revenue |
| Net margin | 3.5% | 10.2% | Net income ÷ revenue |
| Debt to equity | 0.89x | 0.79x | Total debt ÷ shareholders’ equity |
| Interest cover | 11.50x | 4.43x | Operating income ÷ interest expense |
| Current ratio | 0.94x | 1.25x | Current assets ÷ current liabilities |
| Long-term debt to working capital | — | — | Long-term debt ÷ (current assets − current liabilities) |
| Cash conversion | 1.77x | 1.78x | Operating cash flow ÷ net income |
Not computed here: Long-term debt to working capital — why a blank is not a zero.
Ten years of it
The same measures, for every year the filings support. One year is a fact; a row is a business.
| Measure | 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | Median |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Return on equity | 22.9% | 27.9% | 30.8% | 24.8% | 54.2% | 30.2% | 27.7% | 26.0% | 25.0% | 25.0% | 26.0% |
| Return on capital employed | 16.7% | 19.5% | 20.7% | 15.2% | 36.7% | 26.1% | 21.2% | 18.2% | 18.9% | 20.0% | 19.5% |
| Operating margin | 4.9% | 5.2% | 5.3% | 3.5% | 8.4% | 7.0% | 6.0% | 5.5% | 5.8% | 6.9% | 5.5% |
| Net margin | 3.5% | 3.8% | 3.9% | 2.5% | 6.6% | 4.7% | 4.2% | 3.9% | 4.0% | 3.9% | 3.9% |
| Debt to equity | 0.89x | 0.95x | 1.05x | 1.26x | 0.90x | 0.74x | 0.86x | 1.00x | 0.92x | 1.23x | 0.92x |
| Current ratio | 0.94x | 0.94x | 0.91x | 0.92x | 0.99x | 1.03x | 0.89x | 0.83x | 0.96x | 0.94x | 0.94x |
| Cash conversion | 1.77x | 1.80x | 2.08x | 1.45x | 1.24x | 2.41x | 2.17x | 2.03x | 2.38x | 1.99x | 1.99x |
How it compares in consumer discretionary
Among the 44 consumer discretionary companies here measured on free cash flow, Target pays out less than 9 of them. The median for that group is 37.5%, against this company’s 72.4%.
Closest on free cash flow
- Mcdonalds (MCD) 71.2%
- Home Depot (HD) 72.4%
- United Rentals (URI) 74.6%
- Restaurant Brands International Limited Partnership (QSP) 76.5%
Same sector and same denominator, so the figures are comparable. All 48 in consumer discretionary →