DOLLAR GENERAL CORP (DG) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DG - US2566771059 - Common Stock
141.78 USD
-3.26 (-2.25%)
141.78 USD
0 (0%)
Overall DG gets a fundamental rating of 5 out of 10. We evaluated DG against 38 industry peers in the Consumer Staples Distribution & Retail industry. DG has an average financial health and profitability rating. DG is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year DG was profitable.
- 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 Return On Assets (4.03%) which is comparable to the rest of the industry.
- Looking at the Return On Equity, with a value of 15.60%, DG is in the better half of the industry, outperforming 63.16% of the companies in the same industry.
- The Return On Invested Capital of DG (6.03%) is comparable to the rest of the industry.
- The Average Return On Invested Capital over the past 3 years for DG is significantly below the industry average of 28.30%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.03% | ||
| ROE | 15.6% | ||
| ROIC | 6.03% |
ROA(3y)5.77%
ROA(5y)7.34%
ROE(3y)27.8%
ROE(5y)32.31%
ROIC(3y)8.49%
ROIC(5y)10.34%
1.3 Margins
- DG has a Profit Margin of 3.03%. This is in the better half of the industry: DG outperforms 76.32% of its industry peers.
- DG's Profit Margin has declined in the last couple of years.
- The Operating Margin of DG (4.49%) is better than 78.95% of its industry peers.
- DG's Operating Margin has declined in the last couple of years.
- DG has a Gross Margin of 30.41%. This is amongst the best in the industry. DG outperforms 81.58% of its industry peers.
- 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 | 4.49% | ||
| PM (TTM) | 3.03% | ||
| GM | 30.41% |
OM growth 3Y-20.24%
OM growth 5Y-10.71%
PM growth 3Y-26.62%
PM growth 5Y-14.8%
GM growth 3Y-2.16%
GM growth 5Y-0.66%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DG is still creating some value.
- DG has about the same amout of 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
- An Altman-Z score of 2.57 indicates that DG is not a great score, but indicates only limited risk for bankruptcy at the moment.
- DG's Altman-Z score of 2.57 is on the low side compared to the rest of the industry. DG is outperformed by 65.79% of its industry peers.
- The Debt to FCF ratio of DG is 2.20, which is a good value as it means it would take DG, 2.20 years of fcf income to pay off all of its debts.
- DG's Debt to FCF ratio of 2.20 is fine compared to the rest of the industry. DG outperforms 78.95% of its industry peers.
- DG has a Debt/Equity ratio of 0.63. This is a neutral value indicating DG is somewhat dependend on debt financing.
- DG has a Debt to Equity ratio (0.63) which is comparable to the rest of the industry.
- Although DG does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.63 | ||
| Debt/FCF | 2.2 | ||
| Altman-Z | 2.57 |
ROIC/WACC0.75
WACC8.04%
2.3 Liquidity
- DG has a Current Ratio of 1.17. This is a normal value and indicates that DG is financially healthy and should not expect problems in meeting its short term obligations.
- With a Current ratio value of 1.17, DG perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
- DG has a Quick Ratio of 1.17. This is a bad value and indicates that DG is not financially healthy enough and could expect problems in meeting its short term obligations.
- DG has a worse Quick ratio (0.24) than 81.58% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.17 | ||
| Quick Ratio | 0.24 |
3. Growth
3.1 Past
- DG shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.73%, which is quite good.
- Measured over the past years, DG shows a decrease in Earnings Per Share. The EPS has been decreasing by -2.56% on average per year.
- The Revenue has been growing slightly by 4.86% in the past year.
- DG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.91% yearly.
EPS 1Y (TTM)8.73%
EPS 3Y-16.48%
EPS 5Y-2.56%
EPS Q2Q%43.82%
Revenue 1Y (TTM)4.86%
Revenue growth 3Y5.87%
Revenue growth 5Y7.91%
Sales Q2Q%4.58%
3.2 Future
- DG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.15% yearly.
- The Revenue is expected to grow by 4.53% on average over the next years.
EPS Next Y13.07%
EPS Next 2Y11.52%
EPS Next 3Y11.08%
EPS Next 5Y11.15%
Revenue Next Year4.95%
Revenue Next 2Y4.56%
Revenue Next 3Y4.45%
Revenue Next 5Y4.53%
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 accelerating.
- 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
- A Price/Earnings ratio of 21.48 indicates a rather expensive valuation of DG.
- The rest of the industry has a similar Price/Earnings ratio as DG.
- DG's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.60.
- DG is valuated rather expensively with a Price/Forward Earnings ratio of 19.26.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of DG is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of DG to the average of the S&P500 Index (25.83), we can say DG is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.48 | ||
| Fwd PE | 19.26 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DG is on the same level as its industry peers.
- DG's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DG is cheaper than 78.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.34 | ||
| EV/EBITDA | 12.26 |
4.3 Compensation for Growth
- DG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
PEG (NY)1.64
PEG (5Y)N/A
EPS Next 2Y11.52%
EPS Next 3Y11.08%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.63%, DG has a reasonable but not impressive dividend return.
- DG's Dividend Yield is rather good when compared to the industry average which is at 0.73. DG pays more dividend than 81.58% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, DG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.63% |
5.2 History
- On average, the dividend of DG grows each year by 13.01%, which is quite nice.
- DG has paid a dividend for at least 10 years, which is a reliable track record.
- The dividend of DG decreased recently.
Dividend Growth(5Y)13.01%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
- DG pays out 40.66% of its income as dividend. This is a bit on the high side, but may be sustainable.
- The dividend of DG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP40.66%
EPS Next 2Y11.52%
EPS Next 3Y11.08%
DOLLAR GENERAL CORP / DG FAQ
Can you provide the ChartMill fundamental rating for DOLLAR GENERAL CORP?
ChartMill assigns a fundamental rating of 5 / 10 to DG.
Can you provide the valuation status for DOLLAR GENERAL CORP?
ChartMill assigns a valuation rating of 3 / 10 to DOLLAR GENERAL CORP (DG). This can be considered as Overvalued.
How profitable is DOLLAR GENERAL CORP (DG) stock?
DOLLAR GENERAL CORP (DG) has a profitability rating of 5 / 10.
What is the earnings growth outlook for DOLLAR GENERAL CORP?
The Earnings per Share (EPS) of DOLLAR GENERAL CORP (DG) is expected to grow by 13.07% in the next year.
Can you provide the dividend sustainability for DG stock?
The dividend rating of DOLLAR GENERAL CORP (DG) is 5 / 10 and the dividend payout ratio is 40.66%.