The Motley Fool Take

Not unlike the off-price deals on namebrand merchandise found on its shelves, TJX's (NYSE: TJX) T.J. Maxx stores are operating in a real sweet spot these days. In spite of a tough economy marked by stingy consumers, the retailer in December delivered 7 percent sales growth over the past 48 weeks, to $17.5 billion, and 6 percent growth over the past five weeks. For at least the second time this year, the company increased its earnings expectations.

Following news of slow sales and discreetly reported layoffs at many more upscale stores, T.J. Maxx remains one of the few bright spots in retailing. While the retailer credited disciplined cost controls and inventory management, we shouldn't discount pinched shop- pers (who still need new clothes) simply wanting to get more bang for their buck. Positioning itself as a "name brand" for off-price merchandise, T.J. Maxx somehow avoids the stigma that is often attached to discounters.

The sluggish sales growth at other retailers means plenty of inventory is sitting out there for resellers such as TJX to take off their hands.

Hence, at recent levels, the stock carries a reasonable price-to-earnings (P/E) ratio of around 15, for a proven business model growing 13 percent annually, paying a healthy 1.3 percent dividend yield and steadily repurchasing shares. Why, that sounds like the kind of deal you'd find stocked on T.J. Maxx's shelves.