Kohl’s Corporation (KSS), The TJX Companies, Inc. (TJX) & Ross Stores, Inc. (ROST): Buy This Retailer Anytime It Goes on Sale

Both Ross Stores, Inc. (NASDAQ:ROST) and The TJX Companies, Inc. (NYSE:TJX) have underperformed the S&P 500 this last year, up 4.57% and 22.24% respectively. Ross Stores have a minimally higher five year EPS growth rate of 12.10%. These two specialty retailers are so close on so many metrics despite the huge difference in breadth of the chains that it’s difficult to choose.

That said, in surfing for opinions on the Ross Store experience versus TJ Maxx (and Marshall’s) sentiment was decidedly more favorable toward TJ Maxx and several commentators likened Ross Stores, Inc. (NASDAQ:ROST) to a dollar store for clothes with lower quality items.

TJX Total Return Price data by YCharts

Kohl’s chart says it all

On the face of it department store Kohl’s Corporation (NYSE:KSS)’s, considered a competitor to both, would seem to be the better value with a12.25 trailing P/E and a 2.70% yield. It’s not quite as large as The TJX Companies, Inc. (NYSE:TJX) but it has 1,146 stores in 49 states. What business they have pulled from J.C. Penney Company, Inc. (NYSE:JCP) isn’t enough to turn them into a Macy’s, Inc. (NYSE:M). The chart above is perfect proof of what an underperformer the stock is.

However, Kohl’s Corporation (NYSE:KSS)’s is more like J.C. Penney Company, Inc. (NYSE:JCP) as a shopping experience and the chance of getting a high quality designer item at a reasonable price is unlikely. On the same Saturday, Kohl’s wasn’t nearly as busy as TJ Maxx despite stackable coupons and Memorial Day promotions.

Wait and pounce

As an investor you should consider some opportunistic buying of TJX. You won’t ever get that 90% off bargain that you brag about to all your friends but getting a pullback on a general market downturn is entirely possible.

As for Ross Stores, Inc. (NASDAQ:ROST) and Kohl’s Corporation (NYSE:KSS)’s the quality of the shopping experience and their stock doesn’t merit a wait and pounce policy. On Wall Street as on Main Street, never pay retail.

The article Buy This Retailer Anytime It Goes on Sale originally appeared on Fool.com.

AnnaLisa is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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