Although the news has not been terribly good for Target (TGT 1.23%) lately, the data breach issues in late November and early December of last year have created an excellent opportunity for potential investors. The company's stock, which had lost 18% of its value in the last six months, seemed poised to recover before news of the data breach came to light. Since then, more bad news has arrived in the form of allegations that the data breach was preventable. It would seem that it will get worse before it gets better for the company. 

How much worse will it get?
With over fifty lawsuits filed since the breach, the stock price will fall somewhat lower as consumers are tentative about shopping at a company which has been so publicly compromised. The current silence of the company in responding to these allegations will likely hamper investor confidence in the immediate short term.

Yet this creates a perfect scenario for investors looking for a solid buy-and-hold stock. Regardless of the bad press, Target has still achieved an excellent return on investment, with an average return-on-equity in the high teens over the last ten years. What's more, Target continues to do strong business despite the bad press, as its revenue has increased since the second quarter of last year and it has trended upward for the last five years. 

Several analysts are expecting dividends from Target to go up for another year in a row. Currently at $0.43 per share, Target is ranked third on dividend yield among all department-store stocks at 3.07% and second on absolute dividend. With a proven business model in a difficult retail market, the company is able to retain a strong position against competitors.

Comparison to a contemporary
While the companies are rough analogues of one another, Wal-Mart (WMT -0.02%) does not seem to be doing as well as Target. Although Wal-Mart has noticeably larger revenue streams than Target, those streams have not been as regular for the company as investors may have hoped. While doing incredible business in the sense of absolute numbers, Wal-Mart's fourth-quarter revenue was half of what it was in the quarter before. Wal-Mart's stock price has also been trending downward, though there are signs that a two month fall in share price is beginning to turn around.

This may change in the near future; the company has been looking to enter into developing economies by increasing its market presence in locations such as Chile. Yet, with operating costs rising over the last year, Wal-Mart is not doing as well comparatively as Target has been doing, even with the latter's bad press.

Don't reach for your wallet just yet...
Despite the remarks from analysts that Target should be bought immediately, investors may consider waiting another week as news of a weak fourth quarter comes to light. Since the data breach occurred just before the fourth quarter, which has historically been strong for the company, this recent weakness is understandable.

However, this weak quarter does set investors up for buying Target's stock right after the complete fourth-quarter report comes out next week. Though the report may seem to show the results of a weak company, this is due only to recent press and it does not indicate the company's profitability over the long term.