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TJX Companies Dividend Stock Analysis

Dividend Growth Investor profile picture
Dividend Growth Investor


  • TJX Companies is a dividend achiever, which has raised dividends for 22 years in a row. The company just approved a 25% dividend hike.
  • I analyzed the company's fundamentals over the past decade and liked the growth story that can fuel future earnings and dividend growth.
  • I believe that the stock is attractively valued today, though lower entry prices will definitely be welcome.

The TJX Companies, Inc. (NYSE:TJX) operates as an off-price apparel and home fashions retailer in the United States and internationally. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX Europe. TJX Companies is a dividend achiever, which has raised dividends for 22
years in a row.

The most recent dividend increase was in March 2018, when the Board of Directors approved a 25% increase in the quarterly dividend to 39 cents/share.

The company's largest competitors include Ross Stores (ROST), Kohl's (KSS) and Target (TGT).

Over the past decade this dividend growth stock has delivered an annualized total return of 19.20% to its shareholders. Future returns will be dependent on growth in earnings and starting dividend yields obtained by shareholders.

The company has managed to deliver a 17.70% average increase in annual EPS over the past decade. TJX Companies expects diluted earnings per share to be in the range of $4.73 to $4.83 in FY 2019. In comparison, the company earned $4.30/share in FY 2018.

Earnings per share have also been aided by share buybacks. The number of shares outstanding has decreased from 983 million in 2006 to 646 million by 2018. I like the fact that management is focused on delivering excess cashflow and then sharing that cashflow with shareholders in the form of higher dividends and share buybacks. While I would prefer special dividends to buybacks, I will take what I can get.

Future growth in earnings per share will be driven by opening new stores, increasing same store sales, increasing margins, lowering costs and repurchasing shares.

I like the fact that TJX has a better scale in number of stores, purchasing agents and contacts, relative to its close rivals. This could translate into better bargaining power with suppliers, lower prices and high margins. The company has over 1,000 buyers and 18000 vendors

This article was written by

Dividend Growth Investor profile picture
I have been focusing my attention particularly to companies that regularly increase dividends to their shareholders for over a decade. I have also written about about dividend growth stocks on Seeking Alpha and my website for over a decade. I am mostly a buyer of high quality dividend stocks, with solid competitive advantages. My holding period is forever - for as long as the dividend is at least maintained. I tend to concentrate my efforts on stocks which grow earnings and dividends, which provides outstanding total returns over time. I only focus my attention to stocks with sustainable dividend payments. I am also a firm believer in diversification accross sectors and geographic locations. I am a patient buy and hold investor, who believes that having an investment plan, investing regularly per your plan, staying the course, and keeping investment costs low are the best tools in the arsenal for the individual investor.I share my thoughts on investing in dividend paying stocks that have consistently increased their payments over time and tips on growing my dividend income. I hope that my blog will serve as an inspiration for my readers and that it would change their financial lives for the better.

Analyst’s Disclosure: I am/we are long TJX, ROST, TGT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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