What Is One of the Best Retailer Stocks to Buy Right Now?

Investors' concerns about the economy and health of consumers have grown this year. That's explains why the S&P 500 index has gained 14.5% this year (through Oct. 21), while the S&P 500 Retailing industry group is up just 3.3%.

Still, that doesn't mean you should abandon the retail sector. TJX Companies (NYSE: TJX) remains a standout. In fact, it's one of the sector's best long-term buying opportunities.

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A business for all seasons

TJX Companies consists of off-price retail stores under the TJ Maxx, Marshalls, HomeGoods, and Homesense brands. Across these banners, it features a broad range of merchandise, such as apparel, footwear, jewelry, furniture, and rugs, acquired at a discount. It passes these savings on to customers, who go to the stores and websites in search of bargains.

While the business has proven itself a long-term winner, it does particularly well during challenging economic times. TJX ends up with access to a greater amount of goods, while price-sensitive customers flock to its stores to get the most out of their budgets.

That's proven true during this cycle. With customers battling persistently high prices and a tough economic climate, the company's fiscal second-quarter same-store sales (comps) increased across all of its divisions, ranging from 3% to 9%. Companywide comps rose 4%.

Notably, it's not merely discounting its merchandise to clear the shelves. The company's quarterly gross margin expanded 30 basis paints year over year to 30.7%, despite facing higher costs from tariffs. TJX Companies' diluted earnings per share grew 15% to $1.10.

The stock has climbed 19.1% this year (through Oct. 21), outperforming the S&P 500's 14.5% gain. During this time, TJX's valuation has become more expensive with its trailing price-to-earnings ratio increasing from 28 to 33.

That shouldn't dissuade you from buying the stock, though. This top retailer can show resilience when the rest of the retail sector is struggling.

Lawrence Rothman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends TJX Companies. The Motley Fool has a disclosure policy.