Difficult Times For Target Stockholders

Binary options traders should be extra careful when trading Target stock (TGT), because the rumors and contradictory information about the company are abundant these days. Everyone seems to be an expert about what needs to be done when trading their stock, but the truth is that making an accurate short-term prediction for TGT is very difficult. Bloomberg raised some pertinent questions about the recent sales, and the numbers they highlight are far from encouraging. While traders should temper their enthusiasm, it is not wise to go with the flow and march against Target at full throttle.

The Payroll Tax Increase Threat
To say that the economy is not working as it should would be an understatement but it is not a convincing clarification for explaining the less than stellar performance for Target. The retail sector is already struggling and with a payroll tax increase, things will surely turn from bad to worse fairly quickly. On one hand, this appears like a good enough reason to short TGT, or if you are a binary options trader to buy put options right away and wait for the prices to dip even further.

The worst-case scenario is for target stock to sink below $60 and the most pessimistic analysts are even expecting values close to $50 to be reached in a matter of months. With Target reporting better sales from same-stores in the previous month, these numbers seem excessive and riding the trend no longer looks like a good idea. The payroll tax increase threat is viewed as only a temporary obstacle by those who trust Target and some go even as far as to wait for something bad to happen. If TGT is sincerely affected, these confident binary options traders can take advantage of low stock prices and bet on a strong rebound.

Great Dividends Keep Target Stockholders Happy
Another reason for why the stock is unlikely to plummet in the foreseeable future is that stockholders are not willing to sell at the first rumors. The Corporation is offering excellent dividends and it is one of the few companies that has been raising them for many consecutive decades. The resulting yield for the current closing price is excellent and on a yearly basis the dividend growth is nothing short of impressive. Furthermore, the numbers suggest that the dividend growth has increased over the last couple of years, and investors should be motivated by the promise of ever growing shares.

Making assumptions in this line of work is a risky business, and despite the fact that Target is now paying around 28% of its earnings in the form of dividends, there is no guarantee that the growth will continue. While the board has plenty of room to maneuver, this doesn't automatically mean that they will choose to boost the dividends. From a binary options traders point of view, the situation is rather complex and there are very few obvious solutions. The right course of action is to stick to one touch options for the time being, without turning greedy and betting on huge oscillations in TGT price.