Dollar General Story

DG -- USA Stock  

Earnings Report: March 12, 2020  

Macroaxis News
By Nathan Young

Dollar General is a dollar store located throughout the United States. Their main focus is on items that are a little cheaper and inexpensive, which leaves them not as sensitive to price movements within the market. Most sell a small selection of foods, allowing for quick items to be picked up when you are in a pinch.

Dollar General Continues to Execute Within Their Niche Market

Their main competitor would have to be Dollar Tree, and the difference is with Dollar Tree, all of their items are a dollar and under, where as Dollar General has items that many of which are over a dollar. Another competitor to keep in mind is Five Below, which all of their items are five dollars and under.

The benefits to these types of companies are when the market begins to slow, they may lose some sales, but due to their price point, many people will continue to shop their and maybe even increase their spending since the prices are lower. Of course there are many items that Dollar General may not carry that you need from other stores, but for quick things such as cards or small gifts, this store executes that area really well.

Taking a look at the stock price using the monthly time frame, we can see that the price is beginning to slow, which could be a result of the slowing retail sector as a whole. It is still creating higher lows but it is making lower highs and this could be a squeeze that results in a push to the downside. With that in mind, look over the fundamentals and see if the company as a whole is sound and this is just normal buying and selling in the market.

There are a few risks to keep in mind while researching, and the first is they are in the retail space. Given the current situation of retail, it would be wise to keep an eye on their competition to see how they are doing and if there are any storms on the way. Secondly, the store does not carry many of the items people may need, forcing them to shop elsewhere. Now this may not be suitable due to price ranges, but maybe they add more common items and use off brand names. Lastly, the competition at this level is crazy and you have to watch for the best value play. There are at least two large competitors, but there could be more at a local level.

The price point at which this company operates allows it to limit the affects of the overall market, but it certainly is no immune. Watch the competition closely and find which one will provide you with the best value and growth potential. If you become stuck, reach out to an investing professional and they will help to point you in the right direction.

Dollar General Revenue

About Contributor

Nathan Young
   Nathan Young is a Senior Member of Macroaxs Editorial Board - US Equity Analysis. With years of experience in the financial sector, Nathan brings a diverse base of knowledge. Specifically, he has in-depth understanding of application of technical and fundamental analysis across different equity instruments. Utilizing SEC filings and technical indicators, Nathan provides a reputable analysis of companies trading in the United States. View Profile
This story should be regarded as informational only and should not be considered as solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Nathan Young do not own shares of Dollar General Corporation. Please refer to our Terms of Use for any information regarding our disclosure principles.

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Dollar General is rated below average in z score category among related companies. Z-Score is a simple linear, multi-factor model that measures the financial health and economic stability of a company. The score is used to predict probability of a firm going into bankruptcy within next 24 months or two fiscal years from the day stated on the accounting statements used to calculate it. The model uses five fundamental business ratios that are weighted according to algorithm of Professor Edward Altman who developed it in late 1960s at New York University..
Additionally see Dollar General Hype Analysis, Dollar General Correlation and Dollar General Performance. Please also try Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of macroaxis ideas.