Understanding the Upcoming Dividend and Historical Performance
TJX Companies Inc(TJX, Financial) recently announced a dividend of $0.33 per share, payable on 2024-03-07, with the ex-dividend date set for 2024-02-14. 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.
What Does TJX Companies Inc Do?
TJX Companies is the leading off-price retailer of apparel, accessories, and home merchandise in the United States. The firm leverages its more than 21,000 global vendor relationships to procure and sell brand-name merchandise at prices 20%-60% cheaper than conventional retail channels. TJX opportunistically purchases excess inventory that stems from manufacturing overruns and retail closeout sales. The off-price retailer disperses its vast and disparate merchandise across its 4,900 global stores, creating a treasure-hunt shopping experience for consumers. Over three quarters of TJX's sales are derived from the United States, primarily via the T.J. Maxx, Marshalls, and HomeGoods banners. About 10% of sales are from Canada and 12% from Europe and Australia.
A Glimpse at 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.
Breaking Down TJX Companies Inc's Dividend Yield and Growth
As of today, TJX Companies Inc currently has a 12-month trailing dividend yield of 1.31% and a 12-month forward dividend yield of 1.35%. 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 1.99%.
The Sustainability Question: Payout Ratio and Profitability
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 2023-10-31, 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 2023-10-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
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 approximately 61.2% 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 approximately 41.13% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.40%, which outperforms approximately 31.38% of global competitors.
Next Steps
Considering TJX Companies Inc's stable dividend payments, robust dividend growth rate, reasonable payout ratio, strong profitability, and positive growth metrics, the company appears to be a reliable dividend payer. For value investors seeking income-generating stocks, TJX Companies Inc may be an attractive option to consider. However, as with any investment, it's important to conduct thorough research and consider the overall financial health and market conditions before making decisions. Will TJX Companies Inc continue to maintain its dividend appeal in the years to come? That remains an important question for investors to ponder.
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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.
