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TJX Companies (TJX) Hikes Dividend: What Else Should You Know?

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The TJX Companies, Inc. (TJX - Free Report) is focused on enhancing shareholder returns. The renowned off-price retailer of apparel and home fashions announced a dividend hike. It will now pay out a quarterly dividend of 26 cents per share, up 13% from the dividend paid in March 2020. The hiked dividend will be paid out on Mar 4, 2021 to shareholders of record as of Feb 11, 2021.

Notably, TJX Companies currently has a free cash flow yield of 7.3%. With an annual free cash flow return on investment of 56.3%, which is ahead of the industry’s 23.1%; the increased dividend is likely to be sustainable. Dividend payouts are one of the biggest enticements for investors and TJX Companies is committed to boosting shareholders’ wealth.

What Else Should You Know?

TJX Companies is committed toward boosting growth, through effective marketing initiatives and loyalty programs. Incidentally, the company’s aggressive marketing and advertising campaigns through multiple mediums (TV, radio and social media) is aiding growth. In fact, the company’s marketing campaigns aided top-line growth in the third quarter of fiscal 2021. Moreover, management expects its holiday marketing campaigns to drive customer traffic.

Apart from this, TJX Companies’ gift-giving initiatives, unique among off-price retailers and loyalty card program (which offers consumers a non-credit card choice and soft benefits such as early shopping hours) have been helpful in improving customer engagement.


Also, the company is benefiting from its solid store and e-commerce growth efforts. TJX Companies regularly opens stores and expands fast across the United States, Europe, Canada and Australia. Notably, TJX Companies opened 17 new stores in the fiscal third quarter, taking the total count to 4,574. Further, with increasing number of consumers resorting to online shopping, TJX Companies has undertaken several initiatives to boost online sales and strengthen its e-commerce business. Notably, management is on track to add new categories and brands to the U.S. and the U.K. online businesses. In fact, the company is planning to offer a wider range of gifts online during the holiday season.

We note that shares of this Zacks Rank #2 (Buy) company have gained 20.9% in the past three months compared with the industry’s growth of 15.1%.

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