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

Zacks Equity Research

Dollar General (DG) closed at $138.10 in the latest trading session, marking a +1.61% move from the prior day. This change outpaced the S&P 500's 1.21% gain on the day. Elsewhere, the Dow gained 0.97%, while the tech-heavy Nasdaq added 1.35%.

Heading into today, shares of the discount retailer had lost 4.84% over the past month, outpacing the Retail-Wholesale sector's loss of 4.85% and lagging the S&P 500's loss of 3.6% in that time.

DG will be looking to display strength as it nears its next earnings release, which is expected to be August 29, 2019. The company is expected to report EPS of $1.58, up 3.95% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.89 billion, up 6.87% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.47 per share and revenue of $27.52 billion. These totals would mark changes of +8.38% and +7.38%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DG. Recent revisions tend to reflect the latest 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. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. DG is currently a Zacks Rank #3 (Hold).

Looking at its valuation, DG is holding a Forward P/E ratio of 21.01. This represents a no noticeable deviation compared to its industry's average Forward P/E of 21.01.

It is also worth noting that DG currently has a PEG ratio of 1.92. 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 1.87 based on yesterday's closing prices.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 32, which puts it in the top 13% 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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