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 4 out of 10 to DG. DG was compared to 41 industry peers in the Consumer Staples Distribution & Retail industry. DG has only an average score on both its financial health and profitability. DG is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
DG had positive earnings in the past year.
DG had a positive operating cash flow in the past year.
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 (3.61%) which is in line with its industry peers.
DG has a better Return On Equity (15.18%) than 70.73% of its industry peers.
DG has a Return On Invested Capital of 5.53%. This is comparable to the rest of the industry: DG outperforms 48.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DG is in line with the industry average of 8.02%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.61% | ||
| ROE | 15.18% | ||
| ROIC | 5.53% |
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
The Profit Margin of DG (2.77%) is better than 78.05% of its industry peers.
In the last couple of years the Profit Margin of DG has declined.
DG has a better Operating Margin (4.22%) than 78.05% of its industry peers.
In the last couple of years the Operating Margin of DG has declined.
The Gross Margin of DG (29.59%) is better than 73.17% of its industry peers.
DG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.22% | ||
| PM (TTM) | 2.77% | ||
| GM | 29.59% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DG is destroying value.
Compared to 1 year ago, DG has about the same amount of shares outstanding.
The number of shares outstanding for DG has been reduced compared to 5 years ago.
DG has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.24 indicates that DG is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.24, DG is doing worse than 68.29% of the companies in the same industry.
DG has a debt to FCF ratio of 3.70. This is a good value and a sign of high solvency as DG would need 3.70 years to pay back of all of its debts.
DG has a better Debt to FCF ratio (3.70) than 70.73% of its industry peers.
DG has a Debt/Equity ratio of 0.77. This is a neutral value indicating DG is somewhat dependend on debt financing.
The Debt to Equity ratio of DG (0.77) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.7 | ||
| Altman-Z | 2.24 |
ROIC/WACC0.42
WACC13.31%
2.3 Liquidity
A Current Ratio of 1.19 indicates that DG should not have too much problems paying its short term obligations.
DG has a Current ratio (1.19) which is in line with its industry peers.
A Quick Ratio of 0.21 indicates that DG may have some problems paying its short term obligations.
With a Quick ratio value of 0.21, DG is not doing good in the industry: 87.80% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.21 |
3. Growth
3.1 Past
The earnings per share for DG have decreased strongly by -21.69% in the last year.
The Earnings Per Share has been decreasing by -2.56% on average over the past years.
Looking at the last year, DG shows a small growth in Revenue. The Revenue has grown by 4.96% in the last 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)-21.69%
EPS 3Y-16.48%
EPS 5Y-2.56%
EPS Q2Q%-8.2%
Revenue 1Y (TTM)4.96%
Revenue growth 3Y5.87%
Revenue growth 5Y7.91%
Sales Q2Q%4.52%
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 9.02% yearly.
The Revenue is expected to grow by 4.17% on average over the next years.
EPS Next Y-3.24%
EPS Next 2Y3.53%
EPS Next 3Y6.75%
EPS Next 5Y9.02%
Revenue Next Year3.96%
Revenue Next 2Y4.01%
Revenue Next 3Y4.2%
Revenue Next 5Y4.17%
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
The Price/Earnings ratio is 17.26, which indicates a rather expensive current valuation of DG.
Based on the Price/Earnings ratio, DG is valued a bit cheaper than 68.29% of the companies in the same industry.
DG is valuated rather cheaply when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 17.84, DG is valued on the expensive side.
Based on the Price/Forward Earnings ratio, DG is valued a bit cheaper than 68.29% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.43. DG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.26 | ||
| Fwd PE | 17.84 |
4.2 Price Multiples
DG's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, DG is valued cheaper than 82.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.33 | ||
| EV/EBITDA | 10.02 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y3.53%
EPS Next 3Y6.75%
5. Dividend
5.1 Amount
DG has a Yearly Dividend Yield of 2.54%.
DG's Dividend Yield is rather good when compared to the industry average which is at 2.30. DG pays more dividend than 85.37% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, DG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
5.2 History
The dividend of DG is nicely growing with an annual growth rate of 13.03%!
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)13.03%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
46.12% of the earnings are spent on dividend by DG. This is a bit on the high side, but may be sustainable.
DG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP46.12%
EPS Next 2Y3.53%
EPS Next 3Y6.75%
102.2
+4.02 (+4.09%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupConsumer Staples Distribution & Retail
GICS IndustryConsumer Staples Distribution & Retail
Earnings (Last)
Earnings (Next)
Inst Owners95.15%
Inst Owner Change1.25%
Ins Owners0.15%
Ins Owner Change21.44%
Market Cap22.48B
Analysts73
Price Target91.21 (-10.75%)
Short Float %4.5%
Short Ratio2.11
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
Yearly Dividend2.36
Dividend Growth(5Y)13.03%
DP46.12%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.3%
Min EPS beat(2)-7.78%
Max EPS beat(2)8.39%
EPS beat(4)2
Avg EPS beat(4)-1.2%
Min EPS beat(4)-7.78%
Max EPS beat(4)8.39%
EPS beat(8)4
Avg EPS beat(8)-2.62%
EPS beat(12)5
Avg EPS beat(12)-2.92%
EPS beat(16)8
Avg EPS beat(16)-0.73%
Revenue beat(2)0
Avg Revenue beat(2)-2.54%
Min Revenue beat(2)-2.54%
Max Revenue beat(2)-2.53%
Revenue beat(4)0
Avg Revenue beat(4)-3.05%
Min Revenue beat(4)-4.39%
Max Revenue beat(4)-2.53%
Revenue beat(8)0
Avg Revenue beat(8)-3.13%
Revenue beat(12)0
Avg Revenue beat(12)-2.99%
Revenue beat(16)0
Avg Revenue beat(16)-2.87%
PT rev (1m)4.05%
PT rev (3m)1.37%
EPS NQ rev (1m)1.14%
EPS NQ rev (3m)-12.3%
EPS NY rev (1m)0.46%
EPS NY rev (3m)-5.94%
Revenue NQ rev (1m)0.43%
Revenue NQ rev (3m)-0.26%
Revenue NY rev (1m)0.11%
Revenue NY rev (3m)-0.25%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.26 | ||
| Fwd PE | 17.84 | ||
| P/S | 0.55 | ||
| P/FCF | 13.33 | ||
| P/OCF | 7.5 | ||
| P/B | 3.03 | ||
| P/tB | 11.99 | ||
| EV/EBITDA | 10.02 |
EPS(TTM)5.92
EY5.79%
EPS(NY)5.73
Fwd EY5.6%
FCF(TTM)7.67
FCFY7.5%
OCF(TTM)13.62
OCFY13.33%
SpS184.64
BVpS33.71
TBVpS8.53
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.61% | ||
| ROE | 15.18% | ||
| ROCE | 7.06% | ||
| ROIC | 5.53% | ||
| ROICexc | 5.75% | ||
| ROICexgc | 7.54% | ||
| OM | 4.22% | ||
| PM (TTM) | 2.77% | ||
| GM | 29.59% | ||
| FCFM | 4.15% |
ROA(3y)5.77%
ROA(5y)7.34%
ROE(3y)27.8%
ROE(5y)32.31%
ROIC(3y)8.49%
ROIC(5y)10.34%
ROICexc(3y)8.7%
ROICexc(5y)10.71%
ROICexgc(3y)11.43%
ROICexgc(5y)14.56%
ROCE(3y)10.85%
ROCE(5y)13.21%
ROICexcg growth 3Y-21.19%
ROICexcg growth 5Y-10.21%
ROICexc growth 3Y-19.78%
ROICexc growth 5Y-8.48%
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%
F-Score5
Asset Turnover1.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.77 | ||
| Debt/FCF | 3.7 | ||
| Debt/EBITDA | 2.13 | ||
| Cap/Depr | 134.8% | ||
| Cap/Sales | 3.23% | ||
| Interest Coverage | 5.09 | ||
| Cash Conversion | 111.55% | ||
| Profit Quality | 149.85% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.21 | ||
| Altman-Z | 2.24 |
F-Score5
WACC13.31%
ROIC/WACC0.42
Cap/Depr(3y)183.47%
Cap/Depr(5y)179.27%
Cap/Sales(3y)3.91%
Cap/Sales(5y)3.58%
Profit Quality(3y)69.68%
Profit Quality(5y)78.23%
High Growth Momentum
Growth
EPS 1Y (TTM)-21.69%
EPS 3Y-16.48%
EPS 5Y-2.56%
EPS Q2Q%-8.2%
EPS Next Y-3.24%
EPS Next 2Y3.53%
EPS Next 3Y6.75%
EPS Next 5Y9.02%
Revenue 1Y (TTM)4.96%
Revenue growth 3Y5.87%
Revenue growth 5Y7.91%
Sales Q2Q%4.52%
Revenue Next Year3.96%
Revenue Next 2Y4.01%
Revenue Next 3Y4.2%
Revenue Next 5Y4.17%
EBIT growth 1Y-29.93%
EBIT growth 3Y-15.56%
EBIT growth 5Y-3.65%
EBIT Next Year51.21%
EBIT Next 3Y20.52%
EBIT Next 5Y16.03%
FCF growth 1Y143.82%
FCF growth 3Y-2.07%
FCF growth 5Y3.02%
OCF growth 1Y25.26%
OCF growth 3Y1.49%
OCF growth 5Y6.01%