Don't Take a Position in Dollar General Stocks Without Knowing Its Fundamentals!

Dollar General logged a -0.5% change during today's morning session, and is now trading at a price of $129.4 per share.

Dollar General returned losses of -46.8% last year, with its stock price reaching a high of $251.0 and a low of $101.09. Over the same period, the stock underperformed the S&P 500 index by -69.8%. As of April 2023, the company's 50-day average price was $121.67. Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. Based in Goodlettsville, TN, the large-cap Consumer Discretionary company has 170,000 full time employees. Dollar General has offered a 1.8% dividend yield over the last 12 months.

Growing Revenues With Increasing Reinvestment in the Business:

2018 2019 2020 2021 2022 2023
Revenue (MM) $23,471 $25,625 $27,754 $33,747 $34,220 $37,845
Revenue Growth n/a 9.18% 8.31% 21.59% 1.4% 10.59%
Operating Margins 9% 8% 8% 11% 10% 9%
Net Margins 7% 6% 6% 8% 7% 6%
Net Income (MM) $1,539 $1,589 $1,713 $2,655 $2,399 $2,416
Net Interest Expense (MM) $97 $100 $101 $150 $160 $211
Depreciation & Amort. (MM) $404 $454 $505 $574 $641 $725
Earnings Per Share $5.63 $5.97 $6.64 $10.62 $10.17 $10.68
EPS Growth n/a 6.04% 11.22% 59.94% -4.24% 5.01%
Diluted Shares (MM) 273 266 258 250 236 226
Free Cash Flow (MM) $1,156 $1,409 $1,453 $2,848 $1,795 $424
Capital Expenditures (MM) $646 $734 $785 $1,028 $1,070 $1,561
Current Ratio 1.55 1.12 1.28 1.08 1.23 1.39
Total Debt (MM) $2,904 $2,763 $2,912 $2,912 $6,092 $7,545
Net Debt / EBITDA 1.1 0.97 0.25 0.59 1.42 1.77

Dollar General has growing revenues and increasing reinvestment in the business and decent operating margins with a stable trend. Additionally, the company's financial statements display a strong EPS growth trend and healthy leverage. However, the firm has irregular cash flows.

A Very Low P/E Ratio but Trades Above Its Graham Number:

Dollar General has a trailing twelve month P/E ratio of 14.0, compared to an average of 22.96 for the Consumer Discretionary sector. Based on its EPS guidance of $7.54, the company has a forward P/E ratio of 16.1. The 4.3% compound average growth rate of Dollar General's historical and projected earnings per share yields a PEG ratio of 3.29. This suggests that these shares are overvalued. The market is placing a fair value on Dollar General's equity, since its P/B ratio of 4.4 is comparable to its sector average of 4.24. The company's shares are currently trading 57.9% above their Graham number.

Dollar General Has an Average Rating of Buy:

The 27 analysts following Dollar General have set target prices ranging from $100.0 to $187.0 per share, for an average of $138.84 with a buy rating. As of April 2023, the company is trading -12.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Dollar General has an average amount of shares sold short because 2.7% of the company's shares are sold short. Institutions own 91.6% of the company's shares, and the insider ownership rate stands at 0.25%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 10% stake in the company is worth $2,809,347,601.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.