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Attention dividend hunters! The TJX Companies Inc (NYSE:TJX) will be distributing its dividend of $0.39 per share on the 07 June 2018, and will start trading ex-dividend in 5 days time on the 16 May 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding TJX Companies can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for TJX Companies
5 checks you should do on a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
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Is it paying an annual yield above 75% of dividend payers?
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Does it consistently pay out dividends without missing a payment or significantly cutting payout?
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Has it increased its dividend per share amount over the past?
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Is it able to pay the current rate of dividends from its earnings?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does TJX Companies fit our criteria?
TJX Companies has a trailing twelve-month payout ratio of 30.52%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect TJX’s payout to increase to 37.11% of its earnings, which leads to a dividend yield of 2.22%. Moreover, EPS should increase to $4.83. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. TJX has increased its DPS from $0.22 to $1.56 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes TJX a true dividend rockstar. Relative to peers, TJX Companies produces a yield of 1.89%, which is on the low-side for Specialty Retail stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank TJX Companies as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I’ve put together three key factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for TJX’s future growth? Take a look at our free research report of analyst consensus for TJX’s outlook.
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Valuation: What is TJX worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether TJX is currently mispriced by the market.
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Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.