TJX Companies Stock Buy Recommendation Reiterated (TJX)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- TJX Companies (NYSE:TJX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.

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Highlights from the ratings report include:

• Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 37.99% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TJX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
• TJX COMPANIES INC has improved earnings per share by 17.0% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TJX COMPANIES INC increased its bottom line by earning $1.94 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($2.49 versus $1.94).
• The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Specialty Retail industry average. The net income increased by 13.5% when compared to the same quarter one year prior, going from $406.49 million to $461.55 million.
• Despite its growing revenue, the company underperformed as compared with the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• TJX's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels.

The TJX Companies, Inc. operates as an off-price apparel and home fashions retailer in the United States and internationally. TJX Companies has a market cap of $30.98 billion and is part of the services sector and retail industry. The company has a P/E ratio of 18.4, above the S&P 500 P/E ratio of 17.7. Shares are up 30.4% year to date as of the close of trading on Thursday.

You can view the full TJX Companies Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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