Dollar General Corp. (DG) has been a shining star in the bumpy market of the last few months, recently hitting a new all-time high on the heels of another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock is loaded with momentum.
Company Description
Dollar General Corp operates as a discount retailer of general consumer merchandise with a price of $1 in the United States. The company was founded in 1939 and has a market cap of $13.3 billion.
Dollar General has been trading strong in the weak market, recently hitting a new all-time high after reporting strong Q2 results in late August that came in ahead of expectations.
Second-Quarter Results
Revenue for the period was up 11% from last year to $3.58 billion. Earnings also came in strong at 52 cents, 8% ahead of the Zacks Consensus Estimate, where in spite of a 4% miss last quarter the company has an average earnings surprise of 6% over the last four quarters.
The earnings beat was driven by strong some-store sales growth, up 5.9%, better than last year’s 5.1%.
Dollar General sounded optimistic about its business in spite of recent market volatility, raising the low-end of its full-year earnings guidance to $2.22.
Estimates
The analysts are a little more bullish, looking for full-year earnings of $2.32. The next-year estimate of $2.63 is projecting 14% earnings growth.
Valuation
With a PEG ratio of 1.21, DG trades at a premium to the benchmark of 1 for value.
2-Year Chart
Although the ride has been a bit bumpy at times, the last two years have produced big gains for DG shareholders. Look for support from the long-term trend on any weakness.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Momentum Trader Service.
DOLLAR GENERAL (DG): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment