The TJX Companies Inc. (TJX - Analyst Report) announced that its board of directors has approved a 26% hike in its regular quarterly dividend. This is the 17th consecutive year in which the company has hiked its quarterly dividend.
TJX will now pay 14.5 cents dividend per share to its shareholders compared to 11.5 cents paid earlier. The increased dividend will be paid on June 6, 2013, to shareholders of record as of May 16, 2013.
The increased dividend reflects the company’s sound financial position. Signs of economic recovery have made share buybacks and dividend increases a common factor among companies with ample cash. Apart from enhancing shareholders’ return, dividend increase strategy lifts the market value of the stock.
The Framingham, MA-based company hit a 52-week high of $46.85 on Mar 22 and eventually closed at $46.62, recording a healthy return of 8.3% year-to-date. Strong comp sales in Feb and impressive fourth quarter fiscal 2013 results drove share prices.
TJX reported adjusted earnings of 82 cents per share in the fourth quarter of fiscal 2013. It was ahead of the Zacks Consensus Estimate by a penny. At the same time, reported earnings were 32% higher than the year-ago quarter. For fiscal 2013, adjusted earnings went up 28% to $2.55 per share.
The earnings upside was fueled by higher consumer traffic on the back of fresh stocks in the stores and solid comparable-store sales growth over several consecutive months.
TJX exited the quarter with cash and cash equivalents of $1.8 billion, compared with $1.6 billion in the prior quarter. TJX expects to repurchase approximately $1.2 billion to $1.3 billion of its stock in fiscal 2013.
TJX Companies Inc. is an off-price global retailer of apparel and home fashions. The company operates 2,906 stores in the U.S., Canada and Europe.
TJX currently carries a Zacks Rank #3 (Hold). Other stocks in the retail and wholesale sector that are worth considering include Macy’s Inc (M - Analyst Report), which holds a Zacks Rank #1 (Strong Buy).