Target raises dividend by 20%, to boost yield to nearly a percentage point above Walmart’s

Shares of Target Corp.
TGT,
-0.25%
rallied 1.1% in premarket trading Thursday, after the discount retailer said it raised its quarterly dividend by 20%, to $1.08 a share from 90 cents a share. The new dividend will be payable Sept. 10 to shareholders of record on Aug. 17. Based on Wednesday’s stock closing price of $156.70, the new annual dividend rate implies a dividend yield of 2.78%, which compares with the yield for rival Walmart Inc.’s stock
WMT,
+0.32%
of 1.83% and the implied yield for the S&P 500
SPX,
-0.56%
of 1.56%. Target’s dividend hike comes after Target lowered its operating margin guidance earlier this week for the second time in less than a month. Target’s stock has tumbled 32.3% year to date through Wednesday, while Walmart shares have shed 15.5% and the S&P 500 has lost 13.7%.