Fact based stock research
Dollar General (NYSE:DG)

US2566771059

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Dollar General stock research in summary

dollargeneral.com

ANALYSIS: With an Obermatt Combined Rank of 21 (worse than 79% compared with investment alternatives), Dollar General (General Merchandise Stores, USA) shares have lower financial characteristics compared with similar stocks. Shares of Dollar General are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives) but show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 21, is a sell recommendation based on Dollar General's financial characteristics. As the company Dollar General's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 31) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 58% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	58
Growth Rank	31
Safety Rank	28
Combined Rank	21

Country	USA
Industry	General Merchandise Stores
Index	S&P US Luxury, S&P 500
Size class	XX-Large

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Dollar General

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	37	33	63	58
GROWTH
GROWTH	40	49	21	31
SAFETY
SAFETY	60	40	34	28
SENTIMENT
SENTIMENT	n/a	83	61	^new
360° VIEW
360° VIEW	n/a	47	36	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Dollar General is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	37	33	63	58
GROWTH
GROWTH	40	49	21	31
SAFETY
SAFETY	60	40	34	28
COMBINED
COMBINED	51	29	20	21

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Dollar General the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), Dollar General shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Dollar General. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 77% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 41 which means that the stock price compared with what market professionals expect for future profits is higher than 59% of comparable companies, indicating a low value concerning Dollar General's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 34 which means that the stock price compared with what market professionals expect for future profit levels is higher than 66% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 43 is also low. Compared with invested capital, the stock price is higher than for 57% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 58, is a buy recommendation based on Dollar General's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Dollar General? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Dollar General only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	37	26	48	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	63	25	46	34
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	29	36	43
DIVIDEND YIELD
DIVIDEND YIELD	69	63	78	77
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	37	33	63	58

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Dollar General; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Dollar General shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Dollar General. Sales Growth has a rank of 65 which means that currently, professionals expect the company to grow more than 65% of its competitors. Capital Growth is also above 26% of competitors with a rank of 71. But Profit Growth only has a rank of 26, which means that currently professionals expect the company to grow its profits less than 74% of its competitors. And Stock Returns have also been below average with a rank of only 23. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	53	79	70	65
PROFIT GROWTH
PROFIT GROWTH	31	10	33	26
CAPITAL GROWTH
CAPITAL GROWTH	n/a	59	30	71
STOCK RETURNS
STOCK RETURNS	55	47	11	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	40	49	21	31

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Dollar General.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Dollar General has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Dollar General is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Dollar General. Liquidity is at 51, meaning the company generates more profit to service its debt than 51% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 35, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 65% of its competitors. Leverage is also high at a rank of 31, which means that the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Dollar General has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	56	46	21	31
REFINANCING
REFINANCING	56	25	39	35
LIQUIDITY
LIQUIDITY	69	69	58	51
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	60	40	34	28

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Dollar General and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	60	54	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	35	83	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	97	57	^new
MARKET PULSE
MARKET PULSE	n/a	68	34	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	83	61	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Dollar General.
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