Analyzing TJX Companies (NYSE:TJX) and AutoZone (NYSE:AZO)

AutoZone (NYSE:AZO) and TJX Companies (NYSE:TJX) are both large-cap consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AutoZone	12.40%	-80.35%	12.33%
TJX Companies	9.73%	56.56%	15.92%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for AutoZone and TJX Companies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AutoZone	0	6	20	1	2.81
TJX Companies	0	4	16	2	2.91

AutoZone currently has a consensus target price of $3,957.38, suggesting a potential upside of 37.56%. TJX Companies has a consensus target price of $171.63, suggesting a potential upside of 36.01%. Given AutoZone’s higher possible upside, equities research analysts plainly believe AutoZone is more favorable than TJX Companies.

Institutional & Insider Ownership

92.7% of AutoZone shares are owned by institutional investors. Comparatively, 91.1% of TJX Companies shares are owned by institutional investors. 2.6% of AutoZone shares are owned by insiders. Comparatively, 0.2% of TJX Companies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

AutoZone has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, TJX Companies has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Earnings & Valuation

This table compares AutoZone and TJX Companies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AutoZone	$18.94 billion	2.48	$2.50 billion	$145.45	19.78
TJX Companies	$60.37 billion	2.30	$5.49 billion	$5.41	23.33

TJX Companies has higher revenue and earnings than AutoZone. AutoZone 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 AutoZone on 8 of the 15 factors compared between the two stocks.

About AutoZone

AutoZone, Inc. retails and distributes automotive replacement parts and accessories in the United States, Mexico, and Brazil. The company provides various products for cars, sport utility vehicles, vans, and light trucks, including new and remanufactured automotive hard parts, maintenance items, accessories, and non-automotive products. It also offers A/C compressors, batteries and accessories, bearings, belts and hoses, calipers, chassis, clutches, CV axles, engines, fuel pumps, fuses, ignition and lighting products, mufflers, radiators, starters and alternators, thermostats, and water pumps, as well as tire repairs. In addition, the company provides maintenance products, such as antifreeze and windshield washer fluids; brake drums, rotors, shoes, and pads; brake and power steering fluids, and oil and fuel additives; oil and transmission fluids; oil, cabin, air, fuel, and transmission filters; oxygen sensors; paints and accessories; refrigerants and accessories; shock absorbers and struts; spark plugs and wires; and windshield wipers. Further, it offers air fresheners, cell phone accessories, drinks and snacks, floor mats and seat covers, interior and exterior accessories, mirrors, performance products, protectants and cleaners, sealants and adhesives, steering wheel covers, tools, vehicle entertainment systems, and wash and wax products, as well as towing services. Additionally, the company provides a sales program that offers commercial credit and delivery of parts and other products; sells automotive diagnostic and repair software under the ALLDATA brand through alldata.com and alldatadiy.com; and automotive hard parts, maintenance items, accessories, and non-automotive products through autozone.com. AutoZone, Inc. was founded in 1979 and is headquartered in Memphis, Tennessee.

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.