Target Corporation (NYSE:TGT) is a dividend aristocrat, which means it has continuously increased its dividend payout every year for the past 25 years. For Target shareholders, this translates to a steady stream of recurring income. In fact, investing in reliable dividend stocks such as Target is one of the best ways to generate market-beating returns for years on end.

However, just because a stock is a dividend aristocrat doesn't mean it is a screaming buy today. Investors also need to check the underlying fundamentals of the business. It's in this spirit that we'll look at Target Corp., and whether this reliable dividend payer is worth of your investment today.

Targeting winners
The discount retailer has stumbled recently following a disappointing entry into the Canadian market and a massive security breach that left tens of millions of Target customers vulnerable to credit card fraud. Target's stock has barely clocked any gains this year because of these setbacks, with shares up less than one percent year-to-date. But that could change thanks to a management shuffle and the retailer's new strategy to reignite consumer interest in its big box stores.

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Source: The Motley Fool.

"Going forward we have to regain our merchandising authority. We need to be cool again," explained Brian Cornell, Target's new chief executive officer. One of the ways Target is accomplishing this today is through designer collaborations. Target recently teamed up with fashion icon Joseph Altuzarra to bring his namesake brand to Target's stores. Altuzarra designed a special "for Target" collection that launched in Target's stores and online shop earlier this month.

The exclusive collection featured 50 pieces ranging in price from a modest $17.99 to $89.99 for apparel and lingerie, and $29.99 to $79.99 for shoes and accessories. "High fashion for the masses" is what the line should have been called, because Altuzarra's clothing typically sells for thousands of dollars. It's not surprising, then, that the Altuzarra for Target launch was a runaway success -- many items from the line sold out on the first day of the launch, including the Altuzarra for Target trench coat and blazer with peplum detail.

The discount chain has also locked down exclusive partnerships with some other leading brands, including TOMS shoes. These strategic partnerships could help Target poach customers from rivals like Wal-Mart during the upcoming holiday shopping season. I think this creates a buying opportunity for patient investors, particularly as the company continues to reward shareholders with generous dividends and share buybacks.

TGT Chart

TGT data by YCharts

Money in the bank
As you can see in the chart above, Target's dividends grew in excess of 205% over the past five years. The stock currently boasts a dividend yield of 3.3%, with a payout ratio of 72%. The payout ratio is important because it tells investors how much of the company's net income is being given back to shareholders.

Target paid investors $272 million in dividends during the second-quarter of this year, which was an 18% increase over the year-ago period. The retailer also raised the quarterly dividend 21% in June, taking it to $0.52 per share, or $2.08 per share annually. Target has paid a dividend every year since 1967, and has increased its dividends annually for the past 42-years straight.

Shares of Target are trading around $62 a pop today, which is in the middle of the stock's 52-week range. Therefore, I believe long-term investors will benefit from owning the stock here. While Target's comeback story isn't going to happen overnight, this dividend aristocrat will generously reward shareholders in the meantime.

Tamara Rutter owns shares of Target. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.