Stock (Symbol) |
TJX Companies (TJX) |
Stock Price |
$56 |
Sector |
| Retail & Travel |
Data is as of |
| July 18, 2019 |
Expected to Report |
| August 19 |
Company Description |
 The TJX Companies, Inc. (TJX) is an off-price apparel and home fashions. The Company operates through four segments: Marmaxx, HomeGoods, TJX Canada and TJX Europe. The Marmaxx and HomeGoods business offers family apparel, home fashions, accent furniture, lamps, rugs, wall decor, decorative accessories and giftware and other merchandise. The TJX Canada offers jewelry and home fashions. TJX Europe operates the T.K. Maxx and HomeSense chains in Europe. Source: Thomson Financial |
Sharek’s Take |
 TJX Companies (TJX), known for its TJ Maxx and Marshall’s discount clothing stores, is the perfect stock for your mom. It’s safe, has a business that grows a little bit year-after-year, and management pays dividend that can be sent to Mom’s mailbox. Last qtr was the 19th consecutive qtr of customer traffic increases, as same store sales grew 5%, much better than the 2-3% that was expected. Five percent same store sales growth is impressive for such a large retailer.
TJX is the largest major international off-price retailer in the world, operating in the U.S since 1976, in Canada since 1990 (Winners), in the U.K and Ireland since 1994 (where its stores are named as T.K. Maxx). The company is a powerhouse, with 1100 buyers in 10 countries around the world buying from 21,000 vendors in over 100 countries. The company traces its roots back to 1956 when the Zayre discount department store was founded. It opened its first T.J. Maxx in 1976, and eventually sold the Zayre brand to Ames in 1988. Then the company was renamed to The TJX Companies, Inc and focused on T.J. Maxx. The company has around 4300 stores now and sees an opportunity to have 6100 stores. 2018 was the company’s 23rd consecutive year of same store sales increases. TJX brands include:
TJX has been an All-Time stock market winner as its soared from $0.05 to more than $50 since 1980. Although a more mature TJX is unlikely to grow as fast as it used to, store expansion of 5% in addition to mid-single digit same store sales and a large stock buyback program make it possible for TJX to grow profits at a double-digit rate. Management expects to purchase around $2 billion in stock in Fiscal 2020. TJX Companies has raised its dividend every year since 1996 at an average rate of more than 20% a year (the yield is 1%). Management upped the dividend in April, from an annualized $0.78 to $0.92 a share. The company also earns A+ credit rating from Standard & Poor’s. TJX, part of the Conservative Growth Portfolio, is a solid investment for conservative investors that covet safe stocks. |
One Year Chart |
 This stock tried to break out last week, but has since come back a little bit. The stock market has been hot this past month, and many stocks have rallied. I expect the market (and perhaps this stock) to simmer down some. Profit growth is lackluster right now.
The Est. LTG just declined from 12% per year to 9% last qtr, But I think 10-12% growth is achievable long-term. The P/E of 21 where I think it should be. |
Earnings Table |
 Last qtr TJX delivered 0% profit growth as profits were $0.57 vs. $0.57 a year ago. But a year ago there were some analysts who felt the company earned $0.48 during the qtr. When I looked into the issue last year I felt $0.57 was more appropriate. Thus I have 0% growth year-over-year instead of 19% growth. Profits did beat analyst estimates of -5%. TJX has beaten the street or met estimates for 8 straight qtrs.
Annual Profit Estimates stayed around where they were a qtr ago. Qtrly profit Estimates are for 5%, 8%, 12% and 9% growth the next 4 qtrs. If the company can continue to beat estimates, 10% to 12% profit growth could lie ahead. |
Fair Value |
 Although TJX has an Est. LTG of just 9% a year, the stock should have a P/E much higher because management (1) keeps the checkout lines long with good styles and great deals (2) buys back stock and (3) has grown profits every year for more than a decade.
My Fair Value P/E is a P/E of 21, which is where the stock is now. |
Bottom Line |
 TJX has been one of the stock market’s finest stocks the past 35 years. And this machine just keeps chugging along.
This is a great investment for conservative investors, like the moms that shop in its stores regularly. TJX moves up from 23rd to 20th in the Conservative Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio 20 of 35 |
