An Examination of TJX Companies Inc's Dividend Performance and Sustainability
TJX Companies Inc(TJX, Financial) recently announced a dividend of $0.33 per share, payable on 2023-11-30, with the ex-dividend date set for 2023-11-08. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into TJX Companies Inc's dividend performance and assess its sustainability.
Understanding TJX Companies Inc's Business Model
TJX is a leading off-price retailer of apparel, home fashions, and other merchandise. It sells a variety of branded goods, opportunistically buying inventory from a network of over 21,000 vendors worldwide. TJX targets undercutting conventional retailers' regular prices by 20%-60%, capitalizing on a flexible merchandising network, low-frills stores, and a treasure-hunt shopping experience to drive margins and inventory turnover. TJX derived 77% of fiscal 2023 revenue from the United States, with 12% from Europe (mostly the United Kingdom and Germany), 10% from Canada, and the remainder from Australia. The company operated more than 4,800 stores at the end of fiscal 2023 under the T.J. Maxx, T.K. Maxx, Marshalls, HomeGoods, Winners, Homesense, and Sierra banners.
Exploring TJX Companies Inc's Dividend History
TJX Companies Inc has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Understanding TJX Companies Inc's Dividend Yield and Growth
As of today, TJX Companies Inc currently has a 12-month trailing dividend yield of 1.38% and a 12-month forward dividend yield of 1.46%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, TJX Companies Inc's annual dividend growth rate was 9.00%. Extended to a five-year horizon, this rate decreased to 8.70% per year. And over the past decade, TJX Companies Inc's annual dividends per share growth rate stands at an impressive 14.00%. Based on TJX Companies Inc's dividend yield and five-year growth rate, the 5-year yield on cost of TJX Companies Inc stock as of today is approximately 2.09%.
Assessing TJX Companies Inc's Dividend Sustainability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-07-31, TJX Companies Inc's dividend payout ratio is 0.36.
TJX Companies Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks TJX Companies Inc's profitability 8 out of 10 as of 2023-07-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Looking at TJX Companies Inc's Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. TJX Companies Inc's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and TJX Companies Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. TJX Companies Inc's revenue has increased by approximately 7.60% per year on average, a rate that outperforms than approximately 62.69% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, TJX Companies Inc's earnings increased by approximately 5.20% per year on average, a rate that outperforms than approximately 41.91% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.40%, which outperforms than approximately 31.59% of global competitors.
Concluding Remarks
In conclusion, TJX Companies Inc's consistent dividend payments, impressive growth rate, reasonable payout ratio, strong profitability, and robust growth metrics indicate a sustainable dividend. These factors make TJX Companies Inc a compelling consideration for value investors seeking reliable dividend income. However, investors should continue to monitor these factors over time to ensure the sustainability of the dividends.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
