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

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Dollar General (DG) closed the most recent trading day at $248.35, moving +0.7% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.46%, and the tech-heavy Nasdaq lost 0.28%.

Prior to today's trading, shares of the discount retailer had gained 6.19% over the past month. This has outpaced the Retail-Wholesale sector's gain of 4.44% and the S&P 500's gain of 1.51% in that time.

Wall Street will be looking for positivity from Dollar General as it approaches its next earnings report date. In that report, analysts expect Dollar General to post earnings of $2.90 per share. This would mark year-over-year growth of 7.81%. Meanwhile, our latest consensus estimate is calling for revenue of $9.35 billion, up 8.1% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.47 per share and revenue of $37.59 billion. These totals would mark changes of +12.78% and +9.83%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Dollar General. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.02% higher. Dollar General currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Dollar General has a Forward P/E ratio of 21.5 right now. This represents a premium compared to its industry's average Forward P/E of 20.36.

Meanwhile, DG's PEG ratio is currently 1.77. 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. DG's industry had an average PEG ratio of 1.77 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 221, which puts it in the bottom 13% 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.

To follow DG in the coming trading sessions, be sure to utilize Zacks.com.


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