Financial Review: Dollar General (DG) versus Its Peers

Dollar General (NYSE: DG) is one of 12 publicly-traded companies in the “Variety stores” industry, but how does it contrast to its rivals? We will compare Dollar General to similar businesses based on the strength of its dividends, analyst recommendations, valuation, profitability, risk, earnings and institutional ownership.

Insider & Institutional Ownership

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90.9% of Dollar General shares are held by institutional investors. Comparatively, 76.5% of shares of all “Variety stores” companies are held by institutional investors. 0.2% of Dollar General shares are held by insiders. Comparatively, 13.9% of shares of all “Variety stores” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Dollar General has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Dollar General’s rivals have a beta of 0.89, indicating that their average share price is 11% less volatile than the S&P 500.

Dividends

Dollar General pays an annual dividend of $1.04 per share and has a dividend yield of 1.1%. Dollar General pays out 23.2% of its earnings in the form of a dividend. As a group, “Variety stores” companies pay a dividend yield of 1.6% and pay out 36.2% of their earnings in the form of a dividend. Dollar General has increased its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current recommendations and price targets for Dollar General and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dollar General 0 11 14 0 2.56
Dollar General Competitors 163 1263 1690 90 2.53

Dollar General currently has a consensus price target of $97.35, indicating a potential upside of 2.51%. As a group, “Variety stores” companies have a potential upside of 6.50%. Given Dollar General’s rivals higher probable upside, analysts plainly believe Dollar General has less favorable growth aspects than its rivals.

Valuation & Earnings

This table compares Dollar General and its rivals top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Dollar General $23.47 billion $1.54 billion 21.15
Dollar General Competitors $65.63 billion $1.74 billion 21.29

Dollar General’s rivals have higher revenue and earnings than Dollar General. Dollar General is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Dollar General and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dollar General 6.55% 21.65% 10.24%
Dollar General Competitors 3.76% 15.01% 6.64%

Summary

Dollar General beats its rivals on 8 of the 15 factors compared.

Dollar General Company Profile

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. The company offers consumable products, including paper and cleaning products comprising paper towels, bath tissues, paper dinnerware, trash and storage bags, and laundry and other home cleaning supplies; packaged food products, such as cereals, canned soups and vegetables, condiments, spices, sugar, and flour; perishables consisting of milk, eggs, bread, refrigerated and frozen food, beer, and wine; snacks that comprise candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, such as over-the-counter medicines, as well as soap, body wash, shampoo, dental hygiene, and foot care products; pet products, which include pet supplies and pet food; and tobacco products. It also provides seasonal products, including decorations, toys, batteries, small electronics, greeting cards, stationery products, prepaid phones and accessories, gardening supplies, hardware products, and automotive and home office supplies; and home products consisting of kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen products, beds, and bath soft goods. In addition, the company offers apparel for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories. As of August 19, 2017, it operated 14,000 stores located in 44 states. The company was formerly known as J.L. Turner & Son, Inc. and changed its name to Dollar General Corporation in 1968. Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

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