Is The TJX Companies, Inc. (TJX) a Buy?

My only slight concern with Ross Stores: valuation. While the stock trades at a lower 15 forward multiple, the company is growing earnings at a slower 11% clip. This gives Ross Stores, Inc. (NASDAQ:ROST) a slightly higher 1.35 PEG ratio.

So by the slimmest of margins I’m going to award TJX best of breed status in the space. Feel free to disagree in the comments.

Foolish bottom line

TJX has two catalysts that can propel shares higher near term.

First, The TJX Companies, Inc. (NYSE:TJX) is poised to benefit from the collapse of J.C. Penney Company, Inc. (NYSE:JCP). Ex-CEO Ron Johnson’s strategy to cut coupons has plunged the department store into a (irreversible?) tailspin. Last week in the company’s preliminary first quarter numbers, it reported a 16.6% drop in same store sales. Those sales are going somewhere and TJX is poised to pick up a lot of that decline due to the company’s similar strategy and merchandise.

Second, TJX acquired Sierra Trading Post last year for $200 million giving the company instant scale and expertise online. The T.J. Maxx website is expected to be launched in the back-half of this year and could provide a big boost to results.

The article 3 Reasons to Buy This Retailer originally appeared on Fool.com and is written by Robert Baillieul.

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