Dollar General Corporation (NYSE:DG) is a large cap company that operates within the multiline retail industry. Its market cap is $20 billion today, and the total one-year return is -17.05% for shareholders.
Dollar General stock is underperforming the market. It's beaten down, but it reports earnings next week. So is it a good time to buy? To answer this question, we've turned to the Investment U Stock Grader. Our Research Team built this system to diagnose the financial health of a company.
Our system looks at six key metrics...
✗ Earnings-per-Share (EPS) Growth: Dollar General reported a recent EPS growth rate of 15.38%. That's below the multiline retail industry average of 37.59%. That's not a good sign. We like to see companies that have higher earnings growth.
✓ Price-to-Earnings (P/E): The average price-to-earnings ratio of the multiline retail industry is 28.74. And Dollar General's ratio comes in at 16.06. It's trading at a better value than many of its competitors.
✓ Debt-to-Equity : The debt-to-equity ratio for Dollar General stock is 59.4. That's below the multiline retail industry average of 120.28. The company is less leveraged.
✗ Free Cash Flow per Share Growth : Dollar General's FCF has been lower than that of its competitors over the last year. That's not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It's one of our most important fundamental factors.
✓ Profit Margins : The profit margin of Dollar General comes in at 6.89% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. Dollar General's profit margin is above the multiline retail average of 6.61%. So that's a positive indicator for investors.
✓ Return on Equity : Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for Dollar General is 23.2%, and that's above its industry average ROE of 21.15%.
Dollar General stock passes four of our six key metrics today. That's why our Investment U Stock Grader rates it as a Buy With Caution.