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Dollar General (DG) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Dollar General (DG) closed at $220.98, marking a +0.96% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.88%. Meanwhile, the Dow gained 0.57%, and the Nasdaq, a tech-heavy index, added 1.39%.

Heading into today, shares of the discount retailer had gained 11.04% over the past month, outpacing the Retail-Wholesale sector's gain of 4.88% and the S&P 500's gain of 3.54% in that time.

DG will be looking to display strength as it nears its next earnings release. On that day, DG is projected to report earnings of $1.91 per share, which would represent year-over-year growth of 34.51%. Our most recent consensus estimate is calling for quarterly revenue of $7.97 billion, up 13.98% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $10 per share and revenue of $32.88 billion, which would represent changes of +48.59% and +18.45%, respectively, from the prior year.

Any recent changes to analyst estimates for DG should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 2.27% higher within the past month. DG is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DG's current valuation metrics, including its Forward P/E ratio of 21.88. This represents a discount compared to its industry's average Forward P/E of 22.63.

Investors should also note that DG has a PEG ratio of 1.97 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Retail - Discount Stores stocks are, on average, holding a PEG ratio of 3.13 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research