Dollar General Corporation
Dollar General Corporation Fundamental Analysis
Dollar General Corporation (DG) shows moderate financial fundamentals with a PE ratio of 26.55, profit margin of 3.03%, and ROE of 16.31%. The company generates $42.1B in annual revenue with moderate year-over-year growth of 4.96%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 44.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DG's fundamental strength across five key dimensions:
Efficiency Score
WeakDG struggles to generate sufficient returns from assets.
Valuation Score
WeakDG trades at a premium to fair value.
Growth Score
WeakDG faces weak or negative growth trends.
Financial Health Score
ModerateDG shows balanced financial health with some risks.
Profitability Score
ModerateDG maintains healthy but balanced margins.
Key Financial Metrics
Is DG Expensive or Cheap?
P/E Ratio
DG trades at 26.55 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DG's PEG of 3.68 indicates potential overvaluation.
Price to Book
The market values Dollar General Corporation at 4.14 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 6.38 times EBITDA. This is generally considered low.
How Well Does DG Make Money?
Net Profit Margin
For every $100 in sales, Dollar General Corporation keeps $3.03 as profit after all expenses.
Operating Margin
Core operations generate 4.49 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.31 in profit for every $100 of shareholder equity.
ROA
Dollar General Corporation generates $4.03 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Dollar General Corporation generates limited operating cash flow of $3.62B, signaling weaker underlying cash strength.
Free Cash Flow
Dollar General Corporation produces free cash flow of $2.34B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $10.63 in free cash annually.
FCF Yield
DG converts 6.87% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
26.55
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
3.68
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.14
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.81
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
2.02
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.17
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How DG Stacks Against Its Sector Peers
| Metric | DG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 26.55 | 23.21 | Worse (Expensive) |
| ROE | 16.31% | 1251.00% | Weak |
| Net Margin | 3.03% | -5497.00% (disorted) | Weak |
| Debt/Equity | 2.02 | 0.79 | Weak (High Leverage) |
| Current Ratio | 1.17 | 2.44 | Neutral |
| ROA | 4.03% | -200095.00% (disorted) | Weak |
DG outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Dollar General Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
70.74%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
-23.33%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
56.20%
Industry Style: Defensive, Dividend, Low Volatility
High Growth