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Dollar Tree (DLTR) is a Top-Ranked Value Stock: Should You Buy?

·2 min read

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

Dollar Tree (DLTR)

Founded in 1986 and headquartered in Chesapeake, VA, Dollar Tree Inc. is an operator of discount variety stores offering merchandise and other assortments. Its stores successfully operate in major metropolitan areas, mid-sized cities and small towns. The company offers a wide range of quality everyday general merchandise in many categories, including housewares, seasonal goods, candy and food, toys, health and beauty care, gifts, party goods, stationery, books, personal accessories, and other consumer items. Its stores are supported by a nationwide logistics network and distribution centers.

DLTR boasts a Value Style Score of B and VGM Score of A, and holds a Zacks Rank #2 (Buy) rating. Shares of Dollar Tree are trading at a forward earnings multiple of 20.3X, as well as a PEG Ratio of 1.3, a Price/Cash Flow ratio of 18.1X, and a Price/Sales ratio of 1.4X.

Many value investors pay close attention to a company's earnings as well. For DLTR, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $8.15 per share for 2023. Per share DLTR boasts an average earnings surprise of 13.1%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding DLTR to their portfolios.


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