Apriem’s Chief Investment Officer, Benjamin Lau, joins The Street to discuss the likelihood of Amazon purchasing Target and how the offline retailer may see favorable tax rates in 2018. Below is an excerpt:
“Amazon already raised its debt to $40 billion in 2017 from a previous $20 billion – in part due to buying Whole Foods for $13.7 billion, which it is still digesting. To bite off a company the size of Target, “they would double the debt again,” Lau said.
Lau predicts that under the new U.S. corporate-tax law, the retailer’s effective rate will be 21%. That money will more than likely go into stock buybacks, not something like a dividend increase, he said. “Target’s dividend yield is at 3.6%, while Walmart’s is 2% and Costco’s is 1%,” Lau said.”
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