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Two Retail Safe Havens: TJX Companies and Bed Bath & Beyond

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Despite political warfare and tepid job growth threatening the retail sector, these two companies have advantages over their peers.

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As the all-important holiday season approaches, political warfare in the nation's capital, combined with tepid job growth, doesn't bode well for the retail sector. Nonetheless, certain retailers are overcoming these headwinds-which means they're positioned to take off when conditions improve.

Below are two retail companies with inherent advantages that buffer them against the travails of their peers, allowing investors to prosper, even during uncertain times.

As an added bonus, they're not shy about returning value to investors through buybacks, and will continue to generate growth as the retail industry picks up.

TJX Companies (NYSE:TJX), the nation's largest off-price retailer, operates about 3,000 stores through its subsidiaries TJ Maxx, Marshall's, and HomeGoods.

Its business model provides a competitive edge in a challenging retail environment, by offering a viable alternative to customers who may stray from full-priced items at other stores.

TJX has enormous growth potential, domestically and internationally, without cannibalizing its own business. Overall, the company plans to expand its total number of stores by over 50% to 4,700 worldwide.

The company has grown sales an average of 7% for the past five years since the recession, and picked up this pace to 12% growth in fiscal 2013.

For the first half of fiscal 2014, the firm bought back $625 million worth of stock, or 12.9 million shares. TJX expects to repurchase about $1.3 billion to $1.4 billion in shares in fiscal 2014.

The industry leader in off-price merchandise, TJX's price-to-earnings (P/E) ratio of 20.4 is an attractive discount to the industry average of 28.3. This growth company also offers a 1% yield to boot.
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No positions in stocks mentioned.
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