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Player Avatar huddaman (98.15) Submitted: 12/28/2012 4:03:18 PM : Outperform Start Price: $53.08 ROST Score: +4.84

Ross Stores on the surface appears to me as a more efficient operator compared to TJX. It has fewer stores, meaning better opportunity for expansion. Higher operating income per store is another plus. TJX in my opinion with its scale should have been getting better operating profit, but that's not the case. PE is lower too than TJX.
Debt at TJX is high at around 775MM. ROST has debt of 150MM. However, that is not important, because both stores have sufficient cash to pay off the debt and yet have some left. They both have similar dividend yields, high ROE and ROIC. I am satisfied with their FCF to Net Income ratios. They care comparable on EV/Sales ratio basis, however, since ROST has slightly better operating margin, I favor ROST here too.

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