June 20, 2024
Top 10 Stock Dollar General Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Dollar General – Top 10 Stock in S&P 500 Consumer Discretionary Index
Dollar General is listed as a top 10 stock on June 20, 2024 in the market index S&P US Luxury because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for Dollar General on June 20, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | General Merchandise Stores |
| Index | S&P US Luxury, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Dollar General Hold
| 360 METRICS | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 85 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 38 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock Dollar General are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Dollar General. Only the consolidated Value Rank has an attractive rank of 85, which means that the share price of Dollar General is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 85% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 29, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 34, meaning the company has a riskier financing structure than 66% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 62% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 38. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, Dollar General is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 85. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 29), a riskier financing structure than the competition (Safety Rank of 34), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 38) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Dollar General is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Dollar General. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Dollar General only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Dollar General is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Dollar General. Analyst Opinions are at a rank of 67 (better than 67% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 28, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Dollar General. The Professional Investors rank is also low at 41, meaning that professional investors hold less stock in this company than in 59% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 33, which means that the current professional news and professional social networks are critical of this company (more negative news than for 67% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 38 (less encouraging than 62% compared with investment alternatives), Dollar General has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Dollar General Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 85 (better than 85% compared with alternatives) for 2024, Dollar General shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Dollar General. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than for 58% of comparable companies, indicating a good value concerning Dollar General's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 51% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 81 (dividends are expected to be higher than 81% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 53% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Dollar General to 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 85, is a buy recommendation based on Dollar General's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Dollar General Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Dollar General shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Dollar General. Sales Growth has a rank of 63 which means that currently, professionals expect the company to grow more than 63% of its competitors. Capital Growth is also above 26% of competitors with a rank of 72. But Profit Growth only has a rank of 26, which means that currently professionals expect the company to grow its profits less than 74% of its competitors. And Stock Returns have also been below average with a rank of only 25. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Dollar General Debt Financing Safety below-average
| SAFETY METRICS | June 20, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 29 |
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| REFINANCING | ||||||||
| REFINANCING | 39 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Dollar General has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Dollar General is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Dollar General. Liquidity is at 52, meaning the company generates more profit to service its debt than 52% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 39, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 61% of its competitors. Leverage is also high at a rank of 29, which means that the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Dollar General has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Dollar General Below-Average Financial Performance
| COMBINED PERFORMANCE | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 85 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Dollar General (General Merchandise Stores, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Dollar General are a good value (attractively priced) with a consolidated Value Rank of 85 (better than 85% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Dollar General's financial characteristics. As the company Dollar General's key financial metrics exhibit good value (Obermatt Value Rank of 85) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 34), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 85% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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