Dollar General (DG)

[winston]

not vested

Dollar General (DG)
Dollar General Stock Should Continue to Climb Higher Post-Pandemic

This chain of retail stores has been around since 1939. It has an excess of 16,000 stores in more than 45 states.

If you haven’t seen or visited a Dollar General it’s likely because you live in the big city. These stores are built to service more rural communities outside the big city centers.

That gives them very little competition since even the big box retailers can’t touch every small community, but have to find strategic locations where they can draw on a number of small communities. This also makes it one of the most enduring blue-chip stocks to watch today.

Dollar General stores are in those towns. So, consumers may drive 45 minutes to a big box store on the weekend to do grocery shopping, but to grab a light bulb or some snacks or laundry detergent, the Dollar General is around the corner.

And the pandemic has boosted DG’s operations significantly. Not only are the stores convenient, but they’re small, so you don’t spend all day exposed. Plus, the prices are low, which helps if you’re one of the tens of millions who have lost your job.

DG stock is up 22% year to date and has a 0.8% dividend.

Source: Investor Place

[winston]

not vested

Dollar General Corporation (DG)

Boasting more than 16,000 stores, Dollar General counts itself as one of the top discount retailers in the U.S. With some analysts arguing the market is undervaluing the company, now could be the ideal time to get in on the action.

Five-star analyst Rupesh Parikh, of Oppenheimer, is singing a different tune after reevaluating DG’s long-term growth prospects. Even though it has already posted a 22% year-to-date gain, the analyst sees even more upside on the horizon.

“Based on our work, we believe the market is still underappreciating the company's long-term earnings power, following the recent grocery boom, traction from management initiatives, and lasting market share gains coming out of the coronavirus pandemic,” Parikh commented.

According to Parikh, in the near-term, elevated comp growth is likely. To support this claim, he cites the expected growth “in at home food consumption, management initiatives, government stimulus, and benefits from consumer trade-down in a potentially weaker economic environment to drive comps above the company's historical LSD to MSD comp delivery.” It also doesn’t hurt that these benefits and market share gains could persist in the year ahead.

As for its long-term earnings power, Parikh is more optimistic than the rest of the Street. While the consensus estimate has FY20-21 EPS coming in at $8.84 and $8.87, respectively, the Oppenheimer analyst thinks the figures will land at $9.15 and $8.90. It should be noted that share buybacks and any adverse impacts related to Biden's tax and wage proposals aren’t factored into these projections.

Looking more closely at the potential “blue wave” in the upcoming U.S. election, a Biden presidency would mean that the corporate tax rate would jump from 21% to 28%. This increase would negatively impact DG’s FY21 earnings by nearly 10%, based on Parikh’s estimates. He also mentioned, “In addition, an increase to the minimum wage to $15 nationally could also represent an incremental headwind, especially if implemented over a short period.”

That being said, DG’s relative P/E multiple has declined to 0.97x from a recent peak of 1.19x in March 2020, making the valuation more compelling when compared to its peers.

All of the above makes DG a “top pick” for Parikh. As a result, the analyst continues to assign an Outperform rating to the stock. Bumping up the price target from $205 to $225, a potential twelve-month gain of 18% could be in the cards. (To watch Parikh’s track record, click here)

The bulls have it on this one. Out of 18 total reviews published in the last three months, 15 analysts rated the stock a Buy while only 3 said Hold. So, DG gets a Strong Buy consensus rating.

With a $209.71 average price target, shares could surge 10% in the next twelve months.

Source: TipRanks

[winston]

not vested

RETAIL HEADWINDS CAN'T BEAT EVERYDAY GOODS AT CHEAP PRICES

The $50 billion discount retailer sells cheap groceries and household products at more than 16,000 stores across the U.S.

Its high store count ensures that you're never too far from a Dollar General.

And its cheap pricing helps business stay strong during economic downturns. We saw this during the pandemic...

In its most recent quarter, Dollar General's sales surged 24.4% to $8.7 billion.

As you can see in today's chart, DG shares have rebounded strongly off their March lows.

The stock has risen nearly 50% since March 25, and it recently hit a new all-time high.

As long as people still need essential goods at cheap prices, this stock should continue higher...

Source: Daily Wealth

[winston]

not vested

Dollar General (DG)
Dollar General (DG) store front with yellow store sign, midday

Representing the final month of the year is Dollar General, the dollar-store discount chain with 17,000 locations in 46 states. It’s having another strong year, up almost 37% YTD. Combine that with a 10-year annualized total return of 20.8%, and you’ve got one heck of a long-term investment.

As for trailing 12-month free cash flow, it has $3.1 billion, along with an enterprise value of nearly $64 billion. Right now, its FCF yield is 5.9%.

On Nov. 14, the company announced the opening of its 17,000th store in Fountain, Colorado. As a nice gesture to the community, Dollar General donated $17,000 to one of the local schools. In the company’s press release heralding the occasion, CEO Todd Vasos said:

“Since our founding more than 80 years ago, we have remained focused on helping customers save time and money.”

In my book, helping customers save time and money are the hallmarks of any successful business.

Back in November, I also recommended Dollar General as one of three stocks of relative values compared to Nio (NYSE:NIO), the Chinese electric vehicle maker. And while I like Nio long-term, it isn’t a name to buy for the short-term at current prices. DG stock is much more down-to-earth.

As long as working folk need to save money, Dollar General’s business remains a solid bet. In turn, that makes it one of the best stocks to buy going into the uncertainty of 2021.

Source: Investor Place

[winston]

not vested

Dollar General (DG) store front with yellow store sign, midday

I chose Dollar Tree (NASDAQ:DLTR) solely on the basis that it was the value buy and Dollar General was the growth vehicle.

However, just because Dollar General is more expensive than Dollar Tree on a comparison basis — DLTR has a price-to-sales ratio of 1.1 compared to 1.6 for DG — that doesn’t mean that it isn’t still a good deal.

Over the past three years, Dollar General has grown its sales and net profits by 8.1% and 11%, respectively.

Its PEG ratio is 1.57, two basis points less than its five-year average. And yet, in those five years, it’s got an annualized total return of 24.8%, almost double the U.S. markets as a whole.

To keep growing, Dollar General is launching Popshelf, a new concept that’s focusing on non-consumable items, 95% of which will be under $5.

Targeting a female demographic with household incomes between $50,000 and $125,000, it’s definitely looking to build a more affluent clientele.

Source: Investor Place

[behappyalways]

Dollar General Plunges On Missed Earnings, Outlook Slashed; A Warning Sign Consumer Cracks
https://www.zerohedge.com/markets/dolla ... mer-cracks

[winston]

not vested

Dollar General beat estimates for first-quarter same-store sales and profit on Thursday, as more Americans flocked to its stores for pocket-friendly groceries and essentials at a time when sticky inflation continues to pressure household budgets.

Dollar General's same-store sales rose 2.4% for the quarter, compared with analysts' average estimate of a 1.61% increase.

The discount retailer posted per-share profit of US$1.65, compared with analysts' expectation of US$1.57.

Its gross profit as a percentage of net sales, however, came in at 30.2%, down from 31.6% a year earlier, as it resorted to higher markdowns and saw an increase in retail shrink, where inventory is lost or damaged due to theft or breakage.

The company also reaffirmed its annual sales and profit forecasts.

Source: Phillips

[behappyalways]

Dollar General To Eliminate "Vast Majority" Of Self-Checkout Due To Soaring Theft
https://www.zerohedge.com/economics/dol ... ring-theft

[behappyalways]

Dollar General Crashes Most On Record After Management Warns Of "Financially Constrained Core Customer"
https://www.zerohedge.com/markets/dolla ... onstrained

[behappyalways]

Why Dollar Stores Are Struggling
https://m.youtube.com/watch?v=MUJ-u7kpwoM