DG
Dollar General Corporation
Consumer
06/29/2016
Presented
| Date | 06/28/2016 |
| Price | $92.90 |
| Market Cap | $26.66B |
| Ent Value | $26.31B |
| P/E Ratio | 22.44x |
| Book Value | $18.99 |
| Div Yield | 0% |
| Shares O/S | 286.98M |
| Ave Daily Vol | 2,675,081 |
| Short Int | 3.39% |
Current
| Price | $80.57 |
| Market Cap | $17.72B |
| Dollar General Corp. is a discount retailer in the United States. The company offers a selection of merchandise, including consumables, seasonal, home products and apparel. It offers a focused assortment of everyday necessities, which drive frequent customer visits, and key items in a broad range of general merchandise categories. The company's consumables include paper and cleaning products, such as paper towels, bath tissue, paper dinnerware, trash and storage bags, laundry and other home cleaning supplies; packaged food, such as cereals, canned soups and vegetables, condiments, spices, sugar and flour; perishables, such as milk, eggs, bread, frozen meals, beer and wine; snacks, such as candy, cookies, crackers, salty snacks and carbonated beverages; health and beauty, including over-the-counter medicines and personal care products, such as soap, body wash, shampoo, dental hygiene and foot care products; and pet, including pet supplies and pet food. Dollar General was founded by J. L. Turner and Hurley Calister Turner Sr. in 1939 and is headquartered in Goodlettsville, TN. |
Publicly traded companies mentioned herein: Costco Wholesale Corporation (COST), Dollar General Corp (DG), Dollar Tree Inc (DLTR), Dollarama Inc (DOL CN), Wal-Mart Stores Inc (WMT)
Highlights
The presenter believes shares of Dollar General (“DG”) “should be a core position in any long portfolio”; the company is well positioned in its market and has a great track record of delivering positive results regardless of the state of the economy. DG has posted 26 consecutive quarters of same store sales (“SSS”) growth, and during 2008 - 2009 the company saw its best SSS growth ever. Overall, the “dollar segment” of retail is clearly resilient and acyclical, and has been taking share from larger retailers. Thus, investors could look at taking positions in Dollar Tree and Dollarama (based in Canada) as well, but he prefers DG for its stability, transparency, and reasonable valuation. Assuming management can deliver 2% - 3% SSS growth, square footage continues to grow, and earnings growth falls in the 10% - 15% range, the stock should trend up to ~$118 over the next 12 - 24 months (20x calendar 2018 EPS forecasts of ~$5.90).
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