Dollar General Corp (DG, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $158.03, Dollar General Corp has witnessed a daily gain of 1.26%, marked against a three-month change of 16.64%. A thorough analysis, underlined by the GF Score, suggests that Dollar General Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 8/10
- Momentum rank: 7/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and an exceptional growth rank, Dollar General Corp demonstrates strong earning potential and expansion capabilities. Although its financial strength rank is moderate, the overall GF Score of 94 out of 100 signals the highest outperformance potential.
Understanding Dollar General Corp's Business
Dollar General Corp, with a market cap of $34.71 billion and sales of $38.69 billion, operates over 19,000 locations across rural America. As a convenient shopping destination, the company offers a variety of consumable items, including food, health, and beauty products, primarily at a price point of $10 or lower. With an operating margin of 6.32%, Dollar General Corp's business model focuses on serving communities with limited shopping options, providing both branded and private-label products. The retailer's frugal store design and efficient operations have contributed to its success in the retail sector.
Profitability Rank Breakdown
The Profitability Rank of 9/10 for Dollar General Corp reflects its superior ability to generate profits compared to its industry peers. This high rank is indicative of the company's efficient cost management and strong pricing power, which are essential components of a successful retail operation.
Consistent Operational Performance
Dollar General Corp's strong Predictability Rank of 5.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence in the company's ability to maintain its earnings and growth trajectory.
Growth Rank Breakdown
Ranked highly in Growth, Dollar General Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate of 9.2% outperforms 66.89% of 293 companies in the Retail - Defensive industry, showcasing its ability to increase sales and market share.
Conclusion: Dollar General Corp's Position for Potential Outperformance
Considering Dollar General Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic focus on serving underserved markets, combined with its efficient operations and expansion efforts, positions it well for future success. Investors looking for a stock with a strong track record and promising growth prospects may find Dollar General Corp an attractive option.
For GuruFocus Premium members interested in discovering more companies with strong GF Scores, the following screener link is available: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
