January 30, 2025
Top 10 Stock Dollar Tree 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 Tree – Top 10 Stock in S&P 500 Consumer Discretionary Index
Dollar Tree is listed as a top 10 stock on January 30, 2025 in the market index S&P US Luxury because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for Dollar Tree on January 30, 2025.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | General Merchandise Stores |
| Index | NASDAQ 100, NASDAQ, 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 Tree Hold
| 360 METRICS | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| SENTIMENT | ||||||||
| SENTIMENT | 34 |
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| 360° VIEW | ||||||||
| 360° VIEW | 45 |
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ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock Dollar Tree are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Dollar Tree. The consolidated Value Rank has an attractive rank of 50, which means that the share price of Dollar Tree is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 50% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 95. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 34. Professional investors are more confident in 66% other stocks. The consolidated Growth Rank also has a low rank of 23, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 77 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 45, Dollar Tree is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 50), and the financing structure is on the safer side (Safety Rank of 95). However, sentiment in the professional investor community is below-average (Sentiment Rank of 34), as is the growth momentum for the company (Growth Rank of 23). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Dollar Tree only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 34 (better than 34% compared with alternatives), overall professional sentiment and engagement for the stock Dollar Tree is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Dollar Tree. Analyst Opinions are at a rank of 32 (worse than 68% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 52, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Dollar Tree. But the Professional Investors rank is low at 26, which means that professional investors hold less stock in this company than in 74% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 40, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 60% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 34 (less encouraging than 66% compared with investment alternatives), Dollar Tree has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Dollar Tree Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 50 (better than 50% compared with alternatives), Dollar Tree shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Dollar Tree. Price-to-Sales (P/S) is 60, which means that the stock price compared with what market professionals expect for future sales is lower than for 60% of comparable companies, indicating a good value regarding Dollar Tree's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 72% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 56. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Dollar Tree (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 50, is a buy recommendation based on Dollar Tree's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Dollar Tree Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Dollar Tree shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Dollar Tree. Only Capital Growth has a good rank of 51, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 49 which means that currently professionals expect the company to grow less than 51% of its competitors. Profit Growth with a rank of 34 and Stock Returns with a rank of 19 are also low (below 81% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Dollar Tree is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Dollar Tree Debt Financing Safety very solid
| SAFETY METRICS | January 30, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 52 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 95 |
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ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2025, the company Dollar Tree has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Dollar Tree is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Dollar Tree. Leverage is at 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Refinancing is at a rank of 52, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 52% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), Dollar Tree has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Dollar Tree Above-Average Financial Performance
| COMBINED PERFORMANCE | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 50 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 55 |
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ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Dollar Tree (General Merchandise Stores, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Dollar Tree are a good value (attractively priced) with a consolidated Value Rank of 50 (better than 50% of alternatives), are safely financed (Safety Rank of 95, which means low debt burdens), but show below-average growth (Growth Rank of 23). ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Dollar Tree's financial characteristics. As the company Dollar Tree's key financial metrics exhibit good value (Obermatt Value Rank of 50) but low growth (Obermatt Growth Rank of 23) while being safely financed (Obermatt Safety Rank of 95), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 50% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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