Amid rising uncertainties surrounding the sustainability of the market’s momentum, owing to the surge in COVID-19 cases driven by the new Delta variant, investors are shifting their focus to stocks that can offer sustainable returns over the long run. Among other strategies, betting on fundamentally sound growth stocks could be a way to dodge short-term market fluctuations…
Growth stocks, which underperformed versus their value counterparts from January through May of this year, have bounced back lately, which is evident in the S&P SPDR 500 Growth ETF’s (SPYG) 5.3% return over the past month.
Because analysts expect the bearish market sentiment to be short-lived, we think The TJX Companies (TJX – Get Rating) and Boston Scientific Corporation (BSX – Get Rating), which possess solid growth attributes, could be solid bets now.
TJX is a global off-price clothing and home fashions retailer that is based in Framingham, Mass. Marmaxx, HomeGoods, TJX Canada, and TJX International are the four business segments through which the company operates. It sells home basics, furniture, rugs, lighting products, and other home decor accessories and merchandise.
In May, the company’s board of directors reinstated its share repurchase program, under which TJX will repurchase approximately $1.0 – $1.25 billion of its stock during its fiscal year ending January 29, 2022. The decision demonstrates the company’s strong business outlook and ability to maintain a solid balance sheet.
During the first quarter, ended May 1, 2021, TJX’s net sales increased 128.8% year-over-year to $10.09 billion. Its net income came in at $533.93 million for this period, compared to a $887.49 million net loss in the first quarter of 2020. The company’s EPS was $0.44, compared to a $0.74 loss per share in the prior-year period. Also, TJX’s net sales under the Home Goods segment increased 181.8% from the prior-year quarter to $2.14 billion. Its revenue and levered free cash flow have increased at CAGRs of 3.6% over the past five years and 52.5% over the past three years, respectively.
A $2.58 consensus EPS estimate for the current year represents a 732.3% increase year-over-year. The $46.03 billion consensus revenue estimate for the current year represents a 43.2% increase from the same period last year. The stock has gained 25.9% over the past year and 20.1% over the past nine months.
TJX’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
TJX is also rated an A grade for Growth, and a B for Quality and Sentiment. Within the A-rated Fashion & Luxury industry, it is ranked #17 of 66 stocks.
To see additional POWR Ratings for Momentum, Stability, and Value for TJX, click here.
BSX in Marlborough, Mass., is a medical device developer, manufacturer, and marketer that serves various interventional medical specialties. The company operates through three business segments: Cardiovascular, Rhythm Management, and MedSurg.
This month, BSX announced positive 24-month results from…
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