Wednesday, April 22, 2015

Shopping for Bargains with TJX Companies, Inc. - Dividend Stock Analysis

Last week I analyzed Ross Stores, Inc. (NASDAQ:ROST) (Full Analysis Here) and today I wanted to take a closer look at their competitor, TJX Companies, Inc. (NYSE:TJX). TJX Companies is an excellent company that sells clothes and home goods at discounts of 20-60% below department store prices. TJX Companies is a dividend contender with 18 consecutive years of dividend growth and a 10 year growth rate of 22.5% per year. TJX closed trading on Monday, April 20th at $65.97 giving a current yield of 1.27%.

The following tables/graphs are from my personal stock analysis spreadsheet. Data for the stock analysis was acquired from TJX Companies, Inc.'s investor relations page, Morningstar, and Yahoo Finance.

Historic Growth Rates:

Historically, owners of TJX Companies have done very well. According to longrundata.com, TJX has rewarded investors with a total return of 638% or 20.4% annualized over the last 10 years. Looking at the historic growth rates for per share dividends, earnings, revenue, and free cash flow paints a solid historical basis.

You can read the full analysis of TJX Companies, Inc. on Seeking Alpha.

6 comments:

  1. You make a strong case for both companies. I am a little scared of betting on discount retail in a world of increasing income inequality though. At some point, the 99% have nothing left.

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    1. FV,

      I think the discount retailers will continue to do just fine and eventually I'll add one of TJX or ROST to my portfolio. I think both are solid long term growth options as long as you believe people will still visit store fronts.

      Thanks for stopping by!

      Delete
  2. Thank you for the analysis JC. Damn, all these awesome retailers has just run up so much! So hard to pull the trigger on them. In Canada here, the big 3 grocery retailers ( MRU / L / EMP.A ) has a big run up too. One day, everyone's gotta eat and shop right? Take care JC and happy hunting. Cheers bud.

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    1. Hustler,

      Both TJX and ROST seem a bit expensive but I wouldn't say they are at crazy valuations because they will grow into it rather quickly. I plan on adding at least one of these to my portfolio in the future because the long-term growth for both is solid. I like ROST a bit more because they still have the possibility of foreign expansion since they are solely domestic right now. If only those yields were higher.

      Thanks for stopping by!

      Delete
  3. TJX has been an excellent company to hold, its one of the few retailers that you can say has any sort of moat.

    I don't know about you, but my mom/mother in law basically live at marshall/homegoods. I think it plays very well into those generations, as well as younger groups shopping to save money. Good choice.

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    1. Brian,

      Would definitely love to get either ROST or TJX into my portfolio. I guess it's time to do a bit of "boots on the ground" research and camp out in front of some stores to see which do better.

      Thanks for stopping by!

      Delete