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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Dollar General (DG) ten years ago? It may not have been easy to hold on to DG for all that time, but if you did, how much would your investment be worth today?
Dollar General's Business In-Depth
With that in mind, let's take a look at Dollar General's main business drivers.
Founded in 1939 and headquartered in Goodlettsville, Tennessee, Dollar General Corporation is one of the largest discount retailers in the United States. The company trades in low priced merchandise typically $10 or less.
The company offer a wider selection of merchandise, including consumable items, seasonal items, home products and apparel. The company's merchandise comprises national brands from leading manufacturers, as well as own private brand selections with prices at substantial discounts to national brands.
The company sells products from America's renowned manufacturers such as Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg's, General Mills, and PepsiCo.
As of Feb 25, 2022, Dollar General operated approximately 18,190 stores across 47 states. It offers general merchandise under four categories, namely, Consumables, Seasonal, Home products and Apparel.
The Consumables Category (76.7% of Fiscal 2021 Sales) is the leading one, consisting of cleaning products, health & beauty products, snacks, perishables, packaged food and pet supplies and food.
The Seasonal Products (12.2% of Fiscal 2021 Sales) Category consists of prepaid phones and accessories, small electronics, batteries, toys, greeting cards, hardware, decorations, automotive gardening supplies, stationery and home office supplies.
The Home products Category (6.8% of Fiscal 2021 Sales) includes kitchen supplies, candles small appliances, light bulbs, cookware, frames, craft supplies, bed & bath soft goods and storage containers.
The Apparel Category (4.3% of Fiscal 2021 Sales) offers casual daily wear for infants, children, girls, boys, women and men, along with socks, intimate wear, disposable diapers, accessories and shoes.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Dollar General, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in April 2012 would be worth $5,167.69, or a 416.77% gain, as of April 27, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 198.23% and gold's return of 9.88% over the same time frame.
Looking ahead, analysts are expecting more upside for DG.
Shares of Dollar General have risen and outpaced the industry in the past six months. The company’s fourth-quarter fiscal 2021, marked the fourth straight earnings beat. Net sales rose year over year, thanks to growth in Consumables, Seasonal and Home Products categories. Management expects net sales growth of 10% and same-store sales increase of 2.5% for fiscal 2022. Dollar General projected earnings per share growth in the range of 12-14%. We believe better pricing, private label offering and effective inventory management should drive sales. The company’s operational capabilities coupled with real estate growth strategy position it well to gain market share. However, management foresees a tough first-quarter comparison owing to increased cost pressures, supply chain bottlenecks and the favorable impact of stimulus checks last year.
Shares have gained 7.21% over the past four weeks and there have been 22 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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