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TJX or Ross: Which Retailer Is Positioned Better?

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Total YTD returns

Leading off-price retailer TJX Companies (TJX) delivered a total return of 23.5% on a YTD basis as of April 26. Smaller rival Ross Stores’ (ROST) total YTD return was 18.8% as of April 26. Both these off-price retailers have delivered higher YTD returns than the 18.0% total returns of the S&P 500 Index.

Total return, or total shareholder return, encompasses stock price appreciation as well as dividends received over a certain period of time. As of April 26, the stock prices of TJX Companies and Ross Stores have risen 23.1% and 18.4%, respectively, on a YTD basis. The S&P 500 has risen 17.3% since the start of this year.

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TJX Companies stock has surged 10.7% since it announced its results for the fourth quarter of fiscal 2019 in February. TJX Companies’ fourth-quarter sales surpassed expectations, and its adjusted EPS (including the impact of lower taxes) was in line with analysts’ forecast. The company’s same-store sales growth in the holiday sales quarter was 6%.

Ross Stores stock has risen 4.7% since the company declared its results for the fourth quarter of fiscal 2018 in March. Ross Stores also reported better-than-expected sales for the fourth quarter, while earnings were in line with expectations. However, the company issued cautious guidance for fiscal 2019. Ross Stores’ fourth-quarter same-store sales growth was 4.0%.

Who has a better dividend yield?

As of April 26, TJX Companies’ dividend yield of 1.67% was higher than Ross Stores’ dividend yield of 1.04%. This year TJX Companies raised its quarterly dividend per share by 18% to $0.23 (or an annual dividend of $0.92). For TJX Companies, 2019 marked the 23rd consecutive year of dividend hikes. The company paid $923 million in dividends in fiscal 2019. Ross Stores raised its quarterly dividend per share by 13% in 2019 to $0.255 (or an annual dividend per share of $1.02).

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