DOLLAR GENERAL CORP (DG) Stock Fundamental Analysis
NYSE:DG - New York Stock Exchange, Inc. - US2566771059 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to DG. DG was compared to 40 industry peers in the Consumer Staples Distribution & Retail industry. While DG has a great profitability rating, there are some minor concerns on its financial health. DG is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
DG had positive earnings in the past year.
In the past year DG had a positive cash flow from operations.
Each year in the past 5 years DG has been profitable.
In the past 5 years DG always reported a positive cash flow from operatings.
1.2 Ratios
DG has a better Return On Assets (4.25%) than 61.54% of its industry peers.
With a decent Return On Equity value of 18.19%, DG is doing good in the industry, outperforming 71.79% of the companies in the same industry.
DG's Return On Invested Capital of 6.40% is fine compared to the rest of the industry. DG outperforms 61.54% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DG is above the industry average of 8.35%.
The last Return On Invested Capital (6.40%) for DG is well below the 3 year average (10.49%), which needs to be investigated, but indicates that DG had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.25% | ||
| ROE | 18.19% | ||
| ROIC | 6.4% |
ROA(3y)7.6%
ROA(5y)8.12%
ROE(3y)35.51%
ROE(5y)34.39%
ROIC(3y)10.49%
ROIC(5y)11.04%
1.3 Margins
Looking at the Profit Margin, with a value of 3.33%, DG belongs to the top of the industry, outperforming 87.18% of the companies in the same industry.
DG's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 4.98%, DG belongs to the top of the industry, outperforming 84.62% of the companies in the same industry.
In the last couple of years the Operating Margin of DG has declined.
Looking at the Gross Margin, with a value of 29.61%, DG is in the better half of the industry, outperforming 71.79% of the companies in the same industry.
In the last couple of years the Gross Margin of DG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.98% | ||
| PM (TTM) | 3.33% | ||
| GM | 29.61% |
OM growth 3Y-15.59%
OM growth 5Y-5.18%
PM growth 3Y-18.28%
PM growth 5Y-7.09%
GM growth 3Y-1.57%
GM growth 5Y-0.11%
2. Health
2.1 Basic Checks
DG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
DG has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DG has less shares outstanding
The debt/assets ratio for DG has been reduced compared to a year ago.
2.2 Solvency
DG has an Altman-Z score of 2.09. This is not the best score and indicates that DG is in the grey zone with still only limited risk for bankruptcy at the moment.
DG has a Altman-Z score of 2.09. This is in the lower half of the industry: DG underperforms 71.79% of its industry peers.
DG has a debt to FCF ratio of 3.79. This is a good value and a sign of high solvency as DG would need 3.79 years to pay back of all of its debts.
The Debt to FCF ratio of DG (3.79) is better than 69.23% of its industry peers.
A Debt/Equity ratio of 0.78 indicates that DG is somewhat dependend on debt financing.
DG has a Debt to Equity ratio of 0.78. This is comparable to the rest of the industry: DG outperforms 41.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 3.79 | ||
| Altman-Z | 2.09 |
ROIC/WACC0.85
WACC7.55%
2.3 Liquidity
A Current Ratio of 1.15 indicates that DG should not have too much problems paying its short term obligations.
DG has a Current ratio (1.15) which is comparable to the rest of the industry.
A Quick Ratio of 0.15 indicates that DG may have some problems paying its short term obligations.
DG has a worse Quick ratio (0.15) than 92.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 0.15 |
3. Growth
3.1 Past
DG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.15%.
The Earnings Per Share has been growing slightly by 4.63% on average over the past years.
The Revenue has been growing slightly by 2.90% in the past year.
The Revenue has been growing by 8.59% on average over the past years. This is quite good.
EPS 1Y (TTM)-30.15%
EPS 3Y-10.68%
EPS 5Y4.63%
EPS Q2Q%-29.37%
Revenue 1Y (TTM)2.9%
Revenue growth 3Y4.66%
Revenue growth 5Y8.59%
Sales Q2Q%5.05%
3.2 Future
DG is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.36% yearly.
Based on estimates for the next years, DG will show a small growth in Revenue. The Revenue will grow by 5.14% on average per year.
EPS Next Y-21.78%
EPS Next 2Y-10.25%
EPS Next 3Y-3.95%
EPS Next 5Y4.36%
Revenue Next Year5.02%
Revenue Next 2Y4.62%
Revenue Next 3Y4.6%
Revenue Next 5Y5.14%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 12.63, which indicates a correct valuation of DG.
Based on the Price/Earnings ratio, DG is valued cheaply inside the industry as 82.05% of the companies are valued more expensively.
DG is valuated cheaply when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 12.59, DG is valued correctly.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DG indicates a rather cheap valuation: DG is cheaper than 84.62% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. DG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.63 | ||
| Fwd PE | 12.59 |
4.2 Price Multiples
DG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DG is cheaper than 71.79% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DG is valued cheaper than 92.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.23 | ||
| EV/EBITDA | 7.63 |
4.3 Compensation for Growth
DG has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as DG's earnings are expected to decrease with -3.95% in the coming years.
PEG (NY)N/A
PEG (5Y)2.73
EPS Next 2Y-10.25%
EPS Next 3Y-3.95%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.24%, DG has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.53, DG pays a better dividend. On top of this DG pays more dividend than 92.31% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, DG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
5.2 History
On average, the dividend of DG grows each year by 15.30%, which is quite nice.
DG has paid a dividend for at least 10 years, which is a reliable track record.
DG has decreased its dividend recently.
Dividend Growth(5Y)15.3%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
38.84% of the earnings are spent on dividend by DG. This is a low number and sustainable payout ratio.
DG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.84%
EPS Next 2Y-10.25%
EPS Next 3Y-3.95%
76.69
+0.56 (+0.74%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners95.04%
Inst Owner Change1.04%
Ins Owners0.15%
Ins Owner Change-0.11%
Market Cap16.87B
Analysts71.5
Price Target89.97 (17.32%)
Short Float %5.89%
Short Ratio3.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.24% |
Yearly Dividend2.36
Dividend Growth(5Y)15.3%
DP38.84%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-7.72%
Min EPS beat(2)-7.78%
Max EPS beat(2)-7.66%
EPS beat(4)2
Avg EPS beat(4)-2.95%
Min EPS beat(4)-7.78%
Max EPS beat(4)2.25%
EPS beat(8)3
Avg EPS beat(8)-4.05%
EPS beat(12)4
Avg EPS beat(12)-3.85%
EPS beat(16)7
Avg EPS beat(16)-1.67%
Revenue beat(2)0
Avg Revenue beat(2)-3.47%
Min Revenue beat(2)-4.39%
Max Revenue beat(2)-2.54%
Revenue beat(4)0
Avg Revenue beat(4)-2.96%
Min Revenue beat(4)-4.39%
Max Revenue beat(4)-2.17%
Revenue beat(8)0
Avg Revenue beat(8)-3.23%
Revenue beat(12)0
Avg Revenue beat(12)-3.07%
Revenue beat(16)0
Avg Revenue beat(16)-2.81%
PT rev (1m)-1.59%
PT rev (3m)-12.42%
EPS NQ rev (1m)-2.52%
EPS NQ rev (3m)-32.5%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.69%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-1.48%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.63 | ||
| Fwd PE | 12.59 | ||
| P/S | 0.42 | ||
| P/FCF | 10.23 | ||
| P/OCF | 5.36 | ||
| P/B | 2.3 | ||
| P/tB | 9.35 | ||
| EV/EBITDA | 7.63 |
EPS(TTM)6.07
EY7.91%
EPS(NY)6.09
Fwd EY7.94%
FCF(TTM)7.49
FCFY9.77%
OCF(TTM)14.3
OCFY18.65%
SpS182.63
BVpS33.39
TBVpS8.2
PEG (NY)N/A
PEG (5Y)2.73
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.25% | ||
| ROE | 18.19% | ||
| ROCE | 8.21% | ||
| ROIC | 6.4% | ||
| ROICexc | 6.55% | ||
| ROICexgc | 8.53% | ||
| OM | 4.98% | ||
| PM (TTM) | 3.33% | ||
| GM | 29.61% | ||
| FCFM | 4.1% |
ROA(3y)7.6%
ROA(5y)8.12%
ROE(3y)35.51%
ROE(5y)34.39%
ROIC(3y)10.49%
ROIC(5y)11.04%
ROICexc(3y)10.69%
ROICexc(5y)11.39%
ROICexgc(3y)14.34%
ROICexgc(5y)15.71%
ROCE(3y)13.46%
ROCE(5y)14.17%
ROICexcg growth 3Y-20.25%
ROICexcg growth 5Y-22.27%
ROICexc growth 3Y-18.07%
ROICexc growth 5Y-13.32%
OM growth 3Y-15.59%
OM growth 5Y-5.18%
PM growth 3Y-18.28%
PM growth 5Y-7.09%
GM growth 3Y-1.57%
GM growth 5Y-0.11%
F-Score5
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.78 | ||
| Debt/FCF | 3.79 | ||
| Debt/EBITDA | 1.95 | ||
| Cap/Depr | 159.05% | ||
| Cap/Sales | 3.73% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 106.95% | ||
| Profit Quality | 123.38% | ||
| Current Ratio | 1.15 | ||
| Quick Ratio | 0.15 | ||
| Altman-Z | 2.09 |
F-Score5
WACC7.55%
ROIC/WACC0.85
Cap/Depr(3y)194.17%
Cap/Depr(5y)183.4%
Cap/Sales(3y)3.88%
Cap/Sales(5y)3.5%
Profit Quality(3y)44.67%
Profit Quality(5y)65.22%
High Growth Momentum
Growth
EPS 1Y (TTM)-30.15%
EPS 3Y-10.68%
EPS 5Y4.63%
EPS Q2Q%-29.37%
EPS Next Y-21.78%
EPS Next 2Y-10.25%
EPS Next 3Y-3.95%
EPS Next 5Y4.36%
Revenue 1Y (TTM)2.9%
Revenue growth 3Y4.66%
Revenue growth 5Y8.59%
Sales Q2Q%5.05%
Revenue Next Year5.02%
Revenue Next 2Y4.62%
Revenue Next 3Y4.6%
Revenue Next 5Y5.14%
EBIT growth 1Y-28.58%
EBIT growth 3Y-11.66%
EBIT growth 5Y2.96%
EBIT Next Year17.18%
EBIT Next 3Y9.28%
EBIT Next 5Y10.04%
FCF growth 1Y218.16%
FCF growth 3Y-37.61%
FCF growth 5Y-13.27%
OCF growth 1Y66.64%
OCF growth 3Y-14.87%
OCF growth 5Y2.22%