Dollar General (DG) Tries to Break Higher on Q4 Earnings

What's Happening With DG View more about DG >

Discount retailer Dollar General (DG) is trading just shy of its all-time high ahead of its Q4 report on March 14. The company will report before the market open with analysts expecting earnings of $1.87 per share on revenue of $6.6 billion. During the same period last year the company earned $1.48 on revenue of $6.1 billion and the stock is up 9.4% on the year.

Technical Analysis

DG was recently trading at $118.34 down $2.00 from its 12-month high and $32.80 above its 12-month low. InvestorsObserver’s Stock Score Report gives DG a 92 long-term technical score and a 96 short-term technical score. The stock has recent support above $112.50 and recent resistance below $120.50. Of the 18 analysts who cover the stock 13 rate it Strong Buy, 1 rate it Buy, 4 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, DG gets a score of 87 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

The general trend for the retail sector this earnings season has been positive. Dollar General’s main competitor, Dollar Tree (TREE) reported better than expected numbers on March 6 which pushed that stock to a new 52-week high. The street expects Dollar General to also post better than expected results with a whisper number of $1.88 for the quarter. Dollar General has shown good earnings growth in recent years with profits up 12% per annum over the last five years and analysts see even stronger growth moving forward with forecast earnings growth of 15% annually over the next five years. The stock has a favorable valuation with a forward P/E of 17. Economic conditions remain upbeat for retailers and strong consumer confidence should keep strength in the sector moving forward. Analysts have an average price target of $119.59 on DG stock.

About Dollar General Corporation

A leading American discount retailer, Dollar General operates over 15,000 stores in 44 states, selling branded and private-label products across a wide variety of categories. In fiscal 2018, 78% of net sales came from consumables (including paper and cleaning products, packaged and perishable food, tobacco, and health and beauty items), 12% from seasonal merchandise (such as toys, greeting cards, decorations, and gardening supplies), 6% from home products (for example, kitchen supplies, small appliances, and cookware), and 5% from basic apparel. Stores average roughly 7,400 square feet, and about 75% of Dollar General locations are in towns of 20,000 or fewer people. The company emphasizes value, with more than 80% of its items priced at $5 or less.

Already a member?

Login to see your Stocks to Watch Trade Ideas.

Not yet a member?

Receive a Morning Action trade idea every market day in the Morning Update, plus Stocks to Watch Trade Ideas every Saturday.

Become A Member