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Dollar General (DG) Gains As Market Dips: What You Should Know

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In the latest trading session, Dollar General (DG) closed at $252.08, marking a +1.47% move from the previous day. This change outpaced the S&P 500's 0.28% loss on the day. Elsewhere, the Dow lost 0.14%, while the tech-heavy Nasdaq lost 0.14%.

Coming into today, shares of the discount retailer had gained 0.84% in the past month. In that same time, the Retail-Wholesale sector gained 9.43%, while the S&P 500 gained 8.35%.

Wall Street will be looking for positivity from Dollar General as it approaches its next earnings report date. On that day, Dollar General is projected to report earnings of $2.90 per share, which would represent year-over-year growth of 7.81%. Meanwhile, our latest consensus estimate is calling for revenue of $9.35 billion, up 8.12% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.49 per share and revenue of $37.59 billion. These totals would mark changes of +12.98% and +9.84%, respectively, from last year.

Any recent changes to analyst estimates for Dollar General should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. Dollar General is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that Dollar General has a Forward P/E ratio of 21.62 right now. For comparison, its industry has an average Forward P/E of 20.29, which means Dollar General is trading at a premium to the group.

Also, we should mention that DG has a PEG ratio of 1.78. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Discount Stores was holding an average PEG ratio of 1.84 at yesterday's closing price.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 212, which puts it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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