Financial Survey: TJX Companies (NYSE:TJX) versus Target (NYSE:TGT)

TJX Companies (NYSE:TJX) and Target (NYSE:TGT) are both large-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Insider & Institutional Ownership

91.1% of TJX Companies shares are owned by institutional investors. Comparatively, 79.7% of Target shares are owned by institutional investors. 0.1% of TJX Companies shares are owned by company insiders. Comparatively, 0.2% of Target shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

TJX Companies pays an annual dividend of $1.70 per share and has a dividend yield of 1.3%. Target pays an annual dividend of $4.56 per share and has a dividend yield of 4.7%. TJX Companies pays out 38.7% of its earnings in the form of a dividend. Target pays out 53.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. TJX Companies has increased its dividend for 5 consecutive years and Target has increased its dividend for 54 consecutive years. Target is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings for TJX Companies and Target, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TJX Companies	0	1	20	1	3.00
Target	3	23	10	0	2.19

TJX Companies currently has a consensus price target of $147.5789, suggesting a potential upside of 8.95%. Target has a consensus price target of $113.7419, suggesting a potential upside of 17.20%. Given Target’s higher possible upside, analysts clearly believe Target is more favorable than TJX Companies.

Risk & Volatility

TJX Companies has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Target has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Profitability

This table compares TJX Companies and Target’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TJX Companies	8.59%	58.63%	15.43%
Target	3.72%	23.43%	6.06%

Valuation and Earnings

This table compares TJX Companies and Target”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TJX Companies	$56.36 billion	2.68	$4.86 billion	$4.39	30.86
Target	$106.57 billion	0.41	$4.09 billion	$8.58	11.31

TJX Companies has higher earnings, but lower revenue than Target. Target is trading at a lower price-to-earnings ratio than TJX Companies, indicating that it is currently the more affordable of the two stocks.

Summary

TJX Companies beats Target on 11 of the 18 factors compared between the two stocks.

About TJX Companies

The TJX Companies, Inc., together with its subsidiaries, operates as an off-price apparel and home fashions retailer in the United States, Canada, Europe, and Australia. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. The company sells family apparel, including footwear and accessories; home fashions, such as home basics, furniture, rugs, lighting products, giftware, soft home products, decorative accessories, tabletop, and cookware, as well as expanded pet, and gourmet food departments; jewelry and accessories; and other merchandise. It offers its products through stores and e-commerce sites. The TJX Companies, Inc. was incorporated in 1962 and is headquartered in Framingham, Massachusetts.

About Target

Target Corporation operates as a general merchandise retailer in the United States. The company offers apparel for women, men, boys, girls, toddlers, and infants and newborns, as well as jewelry, accessories, and shoes; and beauty and personal care, baby gear, cleaning, paper products, and pet supplies. It also provides dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, and food service; electronics, which includes video game hardware and software, toys, entertainment, sporting goods, and luggage; and furniture, lighting, storage, kitchenware, small appliances, home decor, bed and bath, home improvement, school/office supplies, greeting cards and party supplies, and other seasonal merchandise. In addition, the company sells merchandise through periodic design and creative partnerships, and shop-in-shop experience; and in-store amenities. Further, it sells its products through its stores; and digital channels, including Target.com. Target Corporation was incorporated in 1902 and is headquartered in Minneapolis, Minnesota.