Our analysis is based on comparing The TJX Cos., Inc. with the following peers – Ross Stores, Inc., Urban Outfitters, Inc., Gap, Inc., Nordstrom, Inc., Stein Mart, Inc., American Eagle Outfitters, Inc., Ascena Retail Group, Inc., Macy’s Inc, Target Corporation and Gordmans Stores, Inc. (ROST-US, URBN-US, GPS-US, JWN-US, SMRT-US, AEO-US, ASNA-US, M-US, TGT-US and GMAN-US).
The TJX Cos., Inc.’s dividend yield is 1.30 percent and its dividend payout is 28.95 percent. This compares to a peer average dividend yield of 3.25 percent and a payout level of 41.50 percent. This relatively lagging dividend performance could spur some dividend action going forward – as long as the company’s relatively strong dividend quality score of 100 out of a possible score of 100 looks sustainable.
Dividend Quality Overview
- Over the last twelve months (prior to October 31, 2016), TJX-US paid a high quality dividend, which represents a yield of 1.30% at the current price.
- Dividends paid during each of the last five years were consistently of high quality.
- The ending cash balance, with a dividend coverage of 4.54x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to October 31, 2016), TJX-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 5.41x), investing cash flow (coverage of -1.75x), issuance cash flow (coverage of -1.48x) and twelve-month prior cash (coverage of 3.41x), for a total dividend coverage of 5.54x.
TJX-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -2.48x). Thus, the total coverage including share buybacks is 8.03x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||0.55||0.99||0.97||1.03||1.15||1.3|
|Dividend Payout (%)||19.69||18.04||19.73||22.22||25.23||28.95|
A complete list of metrics and analysis is available on the company page.
The TJX Cos., Inc. operates as an off-price apparel and home fashions retailer in the United States and worldwide. It operates through the following segments: Marmaxx, HomeGoods, TJX Canada, and TJX Europe. The Marmaxx segment sells family apparel including footwear and accessories, home fashions including home basics, accent furniture, lamps, rugs, wall dÃ©cor, decorative accessories, giftware, and other merchandise. The HomeGoods segment offers home basics, giftware, accent furniture, lamps, rugs, wall dÃ©cor, and decorative accessories. The TJX Canada segment operates the Winners, Marshalls, and HomeSense chains in Canada. The TJX Europe segment operates T.K. Maxx and HomeSense chains in Europe. The company was founded by Stanley Harris Feldberg and Sumner L. Feldberg in 1956 and is headquartered in Framingham, MA.
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