Sometimes, slow and steady wins the race in the stock
Just ask investors who've owned shares of discount retailerTJX
) for the last four years. Since the market low in March 2009,
shares are up a nifty 300%, almost tripling the performance of
the S&P 500.
The firm's stock performance isn't a surprise because it has
one of the most consistent track records of growth in the retail
space. Even during the recession, the company was able to grow
annual earnings, an impressive accomplishment as most other firms
In the latest fiscal year, earnings rose 28% to $2.55 a share
while sales grew 12% to $25.9 billion. Even better, annual return
on equity of 55.5% and pretax margin of 11.9% hit multiyear
TJX has a market capitalization of just over $37 billion. In
June, it declared a quarterly dividend of 14.5 cents a share,
giving it an annual yield of 1.1%.
In the U.S., it operates 1,047 T.J. Maxx, 911 Marshalls and
426 HomeGoods stores. It also has operations in Canada and
When the company reported quarterly results in May, earnings
and sales growth decelerated from the prior quarter. It cited
difficult comparisons for the slower growth. Same-store sales
rose 2%. At Marshalls and T.J. Maxx, same-store sales rose a
combined 1%. At HomeGoods, sales rose 7%. Europe also did well,
with sales up 4%.
Earnings aren't due until Aug. 20. The current consensus
estimate is for earnings to rise 12% to 63 cents a share with
sales up 7% to $6.38 billion. In May, TJX forecast same-store
sales up 2%-3% for the quarter.
TJX recently cleared a flat-base buy point of 51.94. Volume
never came into the stock, though, and it's drifted back to the
buy point in light volume.
The stock is also up 12% from an early breakout at 45.92.