Yahoo Finance The TJX Companies Inc’s (NYSE:TJX) Earnings Grew 28%, Did It Beat Long-Term Trend?
Assessing The TJX Companies Inc’s (NYSE:TJX) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess TJX’s recent performance announced on 03 November 2018 and evaluate these figures to its long-term trend and industry movements.
Check out our latest analysis for TJX Companies
Did TJX beat its long-term earnings growth trend and its industry?
TJX’s trailing twelve-month earnings (from 03 November 2018) of US$3.1b has jumped 28% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.1%, indicating the rate at which TJX is growing has accelerated. What’s enabled this growth? Let’s take a look at if it is only owing to an industry uplift, or if TJX Companies has experienced some company-specific growth.
In terms of returns from investment, TJX Companies has invested its equity funds well leading to a 59% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 21% exceeds the US Specialty Retail industry of 7.6%, indicating TJX Companies has used its assets more efficiently. However, its return on capital (ROC), which also accounts for TJX Companies’s debt level, has declined over the past 3 years from 51% to 47%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 31% to 42% over the past 5 years.
What does this mean?
Though TJX Companies’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research TJX Companies to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TJX’s future growth? Take a look at our free research report of analyst consensus for TJX’s outlook.
Financial Health: Are TJX’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 03 November 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
