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TJX Companies (TJX) Rewards Shareholders, Hikes Dividend

The TJX Companies, Inc.TJX , which has been consistently returning value to shareholders through dividends and share buybacks, made yet another move on these lines. The company's board of directors approved a hike of 25% in its quarterly dividend, to 39 cents per share. This drove the company's shares by nearly 2% on Apr 4. The hiked dividend is payable on Jun 7, 2018, to shareholders of record as of May 17, 2018.

Notably, this was the 22nd consecutive dividend hike by TJX Companies since the initiation of its quarterly dividend program. Over this period, the company's dividend witnessed a compound annual growth rate of 23%. In 2017, the company hiked its dividend by 20% to 31.25 cents.

Moving to the company's buyback initiatives, during the fourth quarter of fiscal 2018, it repurchased 5.4 million shares for $405 million. It repurchased 22.3 million shares for $1.7 billion during fiscal 2018. For fiscal 2019, TJX Companies reiterated plans to repurchase shares worth $2.5-$3.0 billion. Further, management stated that its efforts to return value to shareholders is likely to gain additional boost from the recent tax-reforms.

Well, TJX Companies' efforts to regularly enhance shareholder value reflect its strong financial position, courtesy of effective operational strategies.

Sturdy Performance Boosts Investor Optimism

While many retailers have been ailing under soft traffic stemming from intense competition and rising consumer preference for online shopping, TJX Companies has been defying these industry trends and witnessing growth in its store traffic. The company's impressive merchandising policies and other sales-driving efforts have been benefiting its comparable store sales (comps), driving the top line. Moreover, in effort bid to maintain comps growth, the company regularly opens new stores and consistently expands at a rapid pace across the United States, Europe and Canada. Like TJX Companies, Burlington Stores BURL , a major discount-retailer, has also been undertaking store-expansion initiatives to bolster sales.

Further, strong merchandise margins indicate the company's disciplined inventory management and strength of its off-price business model. In fact, other off-price retailers, such as Ross Stores ROST and Big Lots BIG , have been deriving strength from efficient merchandising policies.

Backed by such endeavors and expanding brand popularity, which have been fueling overall performance, this Zacks Rank #3 (Hold) company's shares have rallied 11% in the past three months, comfortably surpassing the industry 's rise of 1.4%. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Although TJX Companies has been bearing the brunt of rising wage costs for a while, the company has many reasons to cheer and stay positive on its journey ahead That said, we expect the company to maintain its position in investors' good books.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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