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Shares of the off-price apparel chain The TJX Company (TJX - Analyst Report) reached 52-week high of $48.20 on Tuesday, Apr 9, following the company’s announcement of raising its quarterly dividend by 26% from Jun 6 and in anticipation of a strong comparative sales in Mar 2013 scheduled to be reported on Apr 11. They surpassed the previous 52-week high of $47.38 on Apr 2.

The closing price of the textile retailer on Apr 8 was $47.66, representing a solid 1-year return of about 23.3% and year-to-date return of about 10.4%. Average volume of shares traded over the last three months stands at approximately 5872K.

Growth Drivers

TJX reported positive comp sales growth of 1% for February. During fourth quarter fiscal 2013, TJX’s consolidated comparable store sales, excluding the extra week, increased 4.0% on the back of strong performance in all the stores in the U.S., Canada and Europe.

Apart from strong comp sales, TJX 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 Jun 6, 2013, to shareholders of record as of May 16, 2013. The increased dividend reflects the company’s sound financial position.

TJX reported a 32% rise in adjusted earnings to 82 cents per share in the fourth quarter of fiscal 2013. It was ahead of the Zacks Consensus Estimate by a penny. 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 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.

TJXcurrently carries a Zacks Rank #3 (Hold). Other favorable stocks in the retail and wholesale sector that are worth considering include Macy’s Inc (M - Analyst Report) and Safeway Inc (SWY - Analyst Report) hold a Zacks Rank #1 (Strong Buy).

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