The Men’s Wearhouse, Inc. (MW), The TJX Companies, Inc. (TJX): Positive Near Term Catalyst for This Men’s (MW) Retailer

Peer comparison

At around $33.5 per share, The Men’s Wearhouse, Inc. (NYSE:MW) is worth around $1.7 billion on the market. The market values Men’s Wearhouse at only 5.5 times EV/EBITDA. Compared to its peers including Jos. A. Bank Clothiers Inc (NASDAQ:JOSB) and The TJX Companies, Inc. (NYSE:TJX), Men’s Wearhouse is considered to be reasonably valued. Jos. A. Bank is trading at around $41 per share, with a total market cap of around $1.1 billion. It has a bit cheaper valuation at only 5.08 times EV/EBITDA. TJX is the biggest company and has the most expensive valuation among the three. At $45 per share, The TJX Companies, Inc. (NYSE:TJX) has a total market cap of around $33.25 billion on the market. It is valued at 8.82 times EV/EBITDA.

Among the three, Jos. A. Bank is the most profitable company with the highest operating margin of 14.85% while the operating margin of TJX is only 12%. The Men’s Wearhouse, Inc. (NYSE:MW) is the least profitable, generating only 8% operating margin. Interestingly, The TJX Companies, Inc. (NYSE:TJX) generated the highest return on invested capital of 42.6% while the return on invested capital of Jos. A. Bank and Men’s Wearhouse were only 16.2% and 12.19%.

My Foolish take

Men’s Wearhouse, after shedding its K&G stores, will definitely rise due to its stronger balance sheet, more profitability and more growth expansion. Investors could invest long term in both Jos. A. Bank and The TJX Companies, Inc. (NYSE:TJX) as they are much better run retailers with higher margin and return on invested capital.

The article Positive Near Term Catalyst for This Men’s Retailer originally appeared on Fool.com and is written by Anh HOANG.

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