TJX Companies (TJX 0.45%) -- the off-price retailer that owns TJ Maxx, Marshalls, HomeGoods, HomeSense, and Sierra Trading Post -- has fared better than many of its brick-and-mortar peers in recent years.

The company buys liquidated inventories from struggling retailers at rock-bottom prices, passes the savings on to its customers, and frequently refreshes its inventory to keep shoppers interested. This formula generated 24 straight years of comparable-store sales growth and easily weathered three recessions, the rise of Amazon, and the "retail apocalypse" that started ten years ago.

A happy woman carries several shopping bags.

Image source: Getty Images.

Such consistent growth has also enabled TJX to raise its dividend for 24 straight years and boosted its stock price by roughly 1,880% over the past two decades. The business is gradually maturing, but TJX is still opening new stores every year as other retailers scale back their brick-and-mortar presence.

Like other businesses around the country, TJX temporarily closed its stores in light of the COVID-19 pandemic, and its stock has tumbled more than 20% since the beginning of March. However, I believe TJX will remain a solid long-term investment over the next five years.

It's a scavenger with scale

TJX purchases goods from over 21,000 vendors in more than 100 countries. That scale enables the company to negotiate prices that are so low that it can still sell brand-name merchandise at 20% to 60% discounts and still squeeze out a profit.

A rack of clothes being sold at clearance prices.

Image source: Getty Images.

Its clout grows as Amazon, Walmart, and Target put many competitors out of business and force them to liquidate their inventories, which makes TJX a direct beneficiary of the retail apocalypse.

After the COVID-19 crisis ends, apparel retailers and department stores will likely sell their inventories at steep discounts to raise cash and clear their shelves for the next season's products. Retailers that are teetering on the edge of bankruptcy, like J.C. Penney, will likely dump their merchandise for pennies on the dollar.

These tailwinds, which will boost both revenue and margins at TJX, should kick in throughout the second half of 2020. TJX will likely open even more stores -- management guided for 170 net new openings in late February -- and fill the void left by decimated department stores and malls.

TJX will inevitably hit speed bumps along the way, with HomeGoods' exposure to the housing market being a weak link, but its strengths should offset its weaknesses. In short, the business model that's served TJX well for decades should remain resilient over the next five years.

A future Dividend Aristocrat

If TJX raises its dividend in 2021, it will become a "Dividend Aristocrat" -- a member of the S&P 500 that has hiked its payout for at least 25 straight years. Dividend Aristocrats generally attract more income investors, since companies cannot earn that title without stable long-term growth in revenue, earnings, and free cash flow (FCF).

The company pays a forward yield of 2.0% as of this writing, but it only spent 33% of earnings and 38% of FCF on its dividend over the past 12 months. Those low payout ratios indicate TJX can afford to continue paying (and raising) its dividend over the next few years.

TJX also spent 55% of its FCF on share repurchases in the last year. Unlike many other retailers, which implemented disastrous buyback plans, TJX is simultaneously reducing its share count, raising its dividend, opening new stores, and generating positive comps growth with stable profit margins.

It's impossible to tell exactly where TJX stock will be in 2025, but it outperformed the S&P 500 over the past five years. The business is built to weather recessions while capitalizing on the troubles faced by other brick-and-mortar retailers. And it only has a few direct competitors like Ross Stores. Therefore, TJX stock can rise higher over the next five years, outperform the broad market, and reward patient investors with stock buybacks and dividend hikes in the process.