TJX Companies: How the Off-Price Retailer’s Stock Fared in 2018



YTD movement

TJX Companies (TJX) has been delivering consistent sales growth even in a challenging retail market where online retailers are growing stronger. The company’s off-price business model has proved itself not only in the US market but also in international markets like Canada and Europe. As of December 27, TJX Companies stock had risen 14.7% on a YTD basis, outperforming the S&P 500, which was down 6.9%.

In comparison, Ross Stores (ROST) and Burlington Stores (BURL) were up 2.0% and 30.2%, respectively, as of December 27 on a YTD basis.

Article continues below advertisement

Impact of recent results

TJX Companies stock has declined 10.5% since the announcement of the company’s fiscal 2019 third-quarter results in November. TJX Companies delivered impressive results for the quarter and exceeded analysts’ sales and earnings expectations. However, skepticism about the retail sector in general and volatility in the overall market has adversely impacted the company’s stock since the third quarter results were declared. The impact of rising costs, particularly freight costs and wages, on the company’s margins is also a matter of concern.

Dividend yield

This year TJX Companies increased its quarterly dividend by 25% to $0.39 per share, which marked the 22nd consecutive year of dividend hikes. As of December 27, TJX Companies’ dividend yield of 1.8% was higher than Ross Stores’ dividend yield of 1.1%. Smaller rival Burlington Stores doesn’t pay any dividends currently.

In this series on TJX Companies, we’ll discuss in detail the company’s sales and profitability as well as the performance of its domestic and international segments. We’ll also discuss the company’s valuation, and in part six, we’ll look at analysts’ recommendations and whether analysts believe there is upside potential in the stock.


More From Market Realist