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AAPL Is Distracting Investors From a Stock That Has More Than Doubled Its 2026 Return

A Dividend King just posted results that deserve a second look

By Damilola Esebame, CFEI® , Edited by Laura Hohenstein

Updated Sept. 30, 2026

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Apple (NASDAQ:AAPL) earned the top spot among the Magnificent Seven with a 25% year-to-date gain, outpacing every mega-cap tech peer.

The signs of financial success in your portfolio do not always come from the names that dominate headlines, and Target (NYSE:TGT) has delivered what Apple could not: it quietly generated more than double Apple's return.

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Apple's 25% gain leads the Magnificent Seven but trails one retail rival

Apple's 25% year-to-date climb makes it the only Magnificent Seven stock to meaningfully outperform the S&P 500 in 2026, and the company is on pace to post back-to-back double-digit revenue growth for the first time in 15 years, The Motley Fool documented. The momentum has drawn capital from investors who equate Big Tech dominance with portfolio returns.

Target has surged 61% over the same stretch, quadrupling the broader market's gains. The gap between a 25% return and a 61% return in the same calendar year shows how tech-heavy portfolio concentration may cost you more in missed alternatives than it adds in familiarity.

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Target reversed three consecutive years of falling sales under a new CEO

Michael Fiddelke took over as Chief Executive Officer (CEO) in February 2026 after serving two decades inside the company, a leadership change Target disclosed in an SEC filing. The transition came after Target posted negative comparable sales growth in three straight fiscal years, a stretch that cut the stock's value roughly in half.

Fiddelke committed $2 billion to store renovations, merchandising overhauls, and technology upgrades. The plan includes opening 30 new stores, remodeling 130 existing locations, and launching Target Beauty Studio across 600 stores to fill the gap left by the departing Ulta Beauty shop-in-shop partnership, Yahoo Finance confirmed.

Second-quarter comparable sales of 3.8% beat the 2.4% Wall Street consensus

Target reported second-quarter comparable sales growth of 3.8%, above the 2.4% analyst consensus estimate, CNBC confirmed. Store comparable sales rose 2.7% while digital comparable sales jumped 8.7%, and same-day delivery volume surged more than 25%.

Fiddelke framed the results with restraint, stating that "two strong quarters is not the goal" and that the company pursues "sustained, durable top and bottom line growth over time." The language signals awareness that you need more than two quarters to trust a turnaround after three years of declines.

Revenue reached $26.5 billion as all six merchandise categories grew

Net sales reached $26.54 billion in the second quarter, a 5.3% year-over-year increase, CNBC's earnings coverage showed. Key operational results across the quarter include the following.

Fun and hardlines merchandise posted double-digit growth, reflecting renewed consumer discretionary spending at Target locations.
After Michael Fiddelke reorganized Target's merchandising leadership in February, Food & Beverage and Beauty sales grew at high single-digit rates in Q2 2026.
Non-merchandise revenue grew more than 20%, driven by Target's advertising platform and data licensing business.
Capital expenditures rose 27% to $1.4 billion as the company accelerated store remodels tied to the $2 billion turnaround plan.

The stock trades at 15 times forward earnings with a near-3% yield

Target shares trade at roughly 15 times estimated future earnings, a discount to the S&P 500's approximate 21 times multiple, and the 2.95% dividend yield exceeds the combined yield of all seven Magnificent Seven stocks, The Motley Fool highlighted.

The valuation compression reflects lingering skepticism from three years of declining sales, but the Q2 earnings beat suggests the market has not fully priced in the turnaround. A stock growing revenue at 5.3% while raising full-year guidance and trading at 15 times earnings offers a risk-reward profile that growth-heavy tech positions rarely provide.

55 consecutive dividend increases qualify Target as a Dividend King

Target has raised its dividend for 55 consecutive years, earning Dividend King status reserved for companies with at least 50 years of unbroken payout growth. The company paid $518 million in dividends during the second quarter alone, Yahoo Finance confirmed, demonstrating cash generation capacity that survived three years of operational difficulty.

The payout's durability through a stretch when the stock lost half its value and sales contracted year after year underscored the commitment to returning capital to shareholders. Fiddelke's decision to raise capital expenditures by 27% while maintaining the dividend signals confidence that shareholders will not need to subsidize the recovery.

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Fiddelke reshaped the executive team to prioritize merchandising authority

Fiddelke promoted Cara Sylvester to Chief Merchandising Officer (CMO) and Lisa Roath to Chief Operating Officer (COO) in February, centralizing merchandising authority and streamlining decision-making, the SEC filing confirmed. Chief Commercial Officer Rick Gomez departed during the transition, and veteran merchandising executive Jill Sando retired after 29 years with the company.

The organizational changes aligned with Fiddelke's assertion that "Target is not an everything store," a deliberate pivot from the broad-assortment strategy that diluted the retailer's identity during the sales decline. The company launched an external search for a Chief Guest Experience and Marketing Officer to complete the restructuring.

Bottom line

Target's 61% gain in 2026 has outpaced Apple, the S&P 500, and every Magnificent Seven member while the valuation sits compressed at 15 times forward earnings. The second quarter delivered 3.8% comparable sales growth against a 2.4% estimate; all six merchandise categories grew, and the company raised full-year guidance.

The 55-year dividend streak and near-3% yield offer income that tech-heavy portfolios lack. Fiddelke's turnaround carries execution risk, but the current valuation gives you room to start investing in a Dividend King whose fundamentals shifted before the market fully priced the recovery.

This article is for informational purposes only and should not be considered investment advice.

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