The past year has shown some stellar performance for retailer TJX (TJX), the firm behind chains such as T.J. Maxx, Marshall's and HomeGoods. Shares of the firm have rallied more than 43% in the last 12 months, spurred on by fundamental success in its brick-and-mortar stores.
On Wednesday, management announced a 21% increase in its quarterly dividend, bringing it to 11.5 cents per share. That's the 16th straight year of dividend hikes for TJX shareholders.TJX is a league leader in off-price retail. The firm's stores stock major brand name clothing, accessories and housewares at prices that are fairly dramatic discounts to their retail costs, a model that's proven popular in the shadow of a major global recession. TJX has reasonable pricing power with consumers -- if retail prices rise, so too can the discounted price tags on TJX's shelves. At the same time, full-price retailers need TJX because the firm is willing to buy massive swaths of excess inventory. Full-price retailers can bypass the middle-man by opting to sell last season's fashions at their own outlet stores, but for most it's not a feasible model. Retail is extremely capital intense, and TJX provides a top-line boost to its suppliers with zero risk. Those factors should keep quality inventory flowing to TJX's stores for the foreseeable future. To be clear, the firm's 1.06% yield hardly makes it a core income holding. That said, for exposure to discount retail, the firm is hard to beat. TJX, one of Goldman Sachs' Consumer Stock Best Buys for 2012, shows up on a list of 19 "Dividend Opportunity"Stocks. Follow @stockpickr
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