In an attempt to boost shareholders returns, The TJX Companies Inc. TJX confirmed its plan to hike the quarterly dividend by 20%. The company announced the plan during the fourth-quarter fiscal 2015 earnings conference call held on Feb 23, 2015.
TJX will now pay a quarterly dividend of 21 cents per share on Jun 4, 2015 to shareholders of record as of May 14. The increased dividend is equivalent to an annual dividend of 84 cents per share for fiscal 2015, up from 71 cents per share for fiscal 2014. This marks the 19th consecutive year in which the discount retailer hiked its quarterly dividend which has grown at a compounded annual growth rate of 23% over this period.
The new dividend will yield 1.2% annually. Last year, the company increased its quarterly dividend by 21% to 17.5 cents.
TJX consistently returns value to shareholders and in fiscal 2015 it returned a total of $1.7 billion through share repurchase and dividend payout. It also announced its plan to repurchase approximately $1.8 to $1.9 billion common stocks during fiscal 2016 at the earnings conference call.
The dividend hike comes on the heels of higher-than-expected earnings in fourth quarter of fiscal 2015. Earnings per share of 93 cents were ahead of the year-ago results by 15%. Results also surpassed the Zacks Consensus Estimate by 3.3% backed by higher consumer traffic, improved margins and solid comparable-store sales growth in the consecutive months.
However, the company is not immune to the macro challenges that have impacted retailers since the beginning of this year. The ice storms that hit the coasts resulted in unusual cold weather in Jan 2015. This has disrupted the usual shopping trends and is likely to affect the Zacks Rank #4 (Sell) company’s top line in the upcoming quarter.
Key Picks from the Sector
Better-ranked stocks in the retail discount sector include Gordman Stores Inc. GMAN, Burlington Stores Inc. BURL and Ross Stores Inc. ROST. While Gordman Stores sports a Zacks Rank #1 (Strong Buy), Burlington Stores and Ross Stores carry a Zacks Rank #2 (Buy).
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