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. Both the profitability and the financial health of DG get a neutral evaluation. Nothing too spectacular is happening here. DG has a valuation in line with the averages, but on the other hand it scores bad on growth.
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.
DG had positive earnings in each of the past 5 years.
Each year in the past 5 years DG had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 3.72%, DG perfoms like the industry average, outperforming 58.54% of the companies in the same industry.
DG's Return On Equity of 14.98% is fine compared to the rest of the industry. DG outperforms 70.73% of its industry peers.
DG has a Return On Invested Capital (5.55%) which is in line with its industry peers.
The Average Return On Invested Capital over the past 3 years for DG is in line with the industry average of 7.94%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.72% | ||
| ROE | 14.98% | ||
| ROIC | 5.55% |
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 better Profit Margin (2.81%) than 78.05% of its industry peers.
In the last couple of years the Profit Margin of DG has declined.
The Operating Margin of DG (4.24%) is better than 78.05% of its industry peers.
In the last couple of years the Operating Margin of DG has declined.
With a decent Gross Margin value of 29.80%, DG is doing good in the industry, outperforming 75.61% 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 | 4.24% | ||
| PM (TTM) | 2.81% | ||
| GM | 29.8% |
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.
The debt/assets ratio for DG has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.38 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 2.38, DG is doing worse than 70.73% of the companies in the same industry.
DG has a debt to FCF ratio of 2.99. This is a good value and a sign of high solvency as DG would need 2.99 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.99, DG is in the better half of the industry, outperforming 73.17% of the companies in the same industry.
DG has a Debt/Equity ratio of 0.74. This is a neutral value indicating DG is somewhat dependend on debt financing.
DG's Debt to Equity ratio of 0.74 is in line compared to the rest of the industry. DG outperforms 43.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 2.99 | ||
| Altman-Z | 2.38 |
ROIC/WACC0.41
WACC13.57%
2.3 Liquidity
A Current Ratio of 1.23 indicates that DG should not have too much problems paying its short term obligations.
DG's Current ratio of 1.23 is fine compared to the rest of the industry. DG outperforms 60.98% of its industry peers.
DG has a Quick Ratio of 1.23. This is a bad value and indicates that DG is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.20, DG is doing worse than 90.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.23 | ||
| Quick Ratio | 0.2 |
3. Growth
3.1 Past
DG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -11.94%.
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 4.77% in the past year.
Measured over the past years, DG shows a small growth in Revenue. The Revenue has been growing by 7.91% on average per year.
EPS 1Y (TTM)-11.94%
EPS 3Y-16.48%
EPS 5Y-2.56%
EPS Q2Q%7.88%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y5.87%
Revenue growth 5Y7.91%
Sales Q2Q%5.26%
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 9.00% yearly.
The Revenue is expected to grow by 4.19% on average over the next years.
EPS Next Y-3.24%
EPS Next 2Y3.53%
EPS Next 3Y6.77%
EPS Next 5Y9%
Revenue Next Year4.03%
Revenue Next 2Y4.04%
Revenue Next 3Y4.22%
Revenue Next 5Y4.19%
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
With a Price/Earnings ratio of 18.73, DG is valued on the expensive side.
Based on the Price/Earnings ratio, DG is valued a bit cheaper than the industry average as 60.98% of the companies are valued more expensively.
DG is valuated rather cheaply when we compare the Price/Earnings ratio to 26.53, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.86 indicates a rather expensive valuation of DG.
DG's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DG is cheaper than 68.29% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.27. DG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.73 | ||
| Fwd PE | 17.86 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DG.
Based on the Price/Free Cash Flow ratio, DG is valued cheaply inside the industry as 80.49% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.98 | ||
| EV/EBITDA | 10.9 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y3.53%
EPS Next 3Y6.77%
5. Dividend
5.1 Amount
DG has a Yearly Dividend Yield of 2.08%. Purely for dividend investing, there may be better candidates out there.
DG's Dividend Yield is rather good when compared to the industry average which is at 2.18. DG pays more dividend than 82.93% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, DG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
5.2 History
The dividend of DG is nicely growing with an annual growth rate of 13.01%!
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 44.99% 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.
DP44.99%
EPS Next 2Y3.53%
EPS Next 3Y6.77%
113.31
-0.17 (-0.15%)
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 Change1.4%
Ins Owners0.15%
Ins Owner Change22.68%
Market Cap24.92B
Analysts72.31
Price Target97.12 (-14.29%)
Short Float %4.15%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
Yearly Dividend2.36
Dividend Growth(5Y)13.01%
DP44.99%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.5%
Min EPS beat(2)8.39%
Max EPS beat(2)16.62%
EPS beat(4)2
Avg EPS beat(4)2.39%
Min EPS beat(4)-7.78%
Max EPS beat(4)16.62%
EPS beat(8)5
Avg EPS beat(8)0.03%
EPS beat(12)5
Avg EPS beat(12)-1.63%
EPS beat(16)8
Avg EPS beat(16)-1.25%
Revenue beat(2)0
Avg Revenue beat(2)-2.13%
Min Revenue beat(2)-2.53%
Max Revenue beat(2)-1.73%
Revenue beat(4)0
Avg Revenue beat(4)-2.8%
Min Revenue beat(4)-4.39%
Max Revenue beat(4)-1.73%
Revenue beat(8)0
Avg Revenue beat(8)-2.83%
Revenue beat(12)0
Avg Revenue beat(12)-2.94%
Revenue beat(16)0
Avg Revenue beat(16)-2.89%
PT rev (1m)7.59%
PT rev (3m)9.14%
EPS NQ rev (1m)-0.48%
EPS NQ rev (3m)-8.21%
EPS NY rev (1m)0.46%
EPS NY rev (3m)-5.83%
Revenue NQ rev (1m)0.55%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)-0.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.73 | ||
| Fwd PE | 17.86 | ||
| P/S | 0.61 | ||
| P/FCF | 12.98 | ||
| P/OCF | 7.84 | ||
| P/B | 3.24 | ||
| P/tB | 11.51 | ||
| EV/EBITDA | 10.9 |
EPS(TTM)6.05
EY5.34%
EPS(NY)6.35
Fwd EY5.6%
FCF(TTM)8.73
FCFY7.71%
OCF(TTM)14.46
OCFY12.76%
SpS187.02
BVpS35.02
TBVpS9.84
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.72% | ||
| ROE | 14.98% | ||
| ROCE | 7.09% | ||
| ROIC | 5.55% | ||
| ROICexc | 5.75% | ||
| ROICexgc | 7.5% | ||
| OM | 4.24% | ||
| PM (TTM) | 2.81% | ||
| GM | 29.8% | ||
| FCFM | 4.67% |
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)14.55%
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-Score6
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.74 | ||
| Debt/FCF | 2.99 | ||
| Debt/EBITDA | 2.09 | ||
| Cap/Depr | 126.87% | ||
| Cap/Sales | 3.06% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 116.19% | ||
| Profit Quality | 166.45% | ||
| Current Ratio | 1.23 | ||
| Quick Ratio | 0.2 | ||
| Altman-Z | 2.38 |
F-Score6
WACC13.57%
ROIC/WACC0.41
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)-11.94%
EPS 3Y-16.48%
EPS 5Y-2.56%
EPS Q2Q%7.88%
EPS Next Y-3.24%
EPS Next 2Y3.53%
EPS Next 3Y6.77%
EPS Next 5Y9%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y5.87%
Revenue growth 5Y7.91%
Sales Q2Q%5.26%
Revenue Next Year4.03%
Revenue Next 2Y4.04%
Revenue Next 3Y4.22%
Revenue Next 5Y4.19%
EBIT growth 1Y-22.54%
EBIT growth 3Y-15.56%
EBIT growth 5Y-3.65%
EBIT Next Year51.57%
EBIT Next 3Y20.7%
EBIT Next 5Y16.06%
FCF growth 1Y2186.1%
FCF growth 3Y-2.07%
FCF growth 5Y3.02%
OCF growth 1Y84.19%
OCF growth 3Y1.49%
OCF growth 5Y6.01%