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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Dollar General Corporation (XNYS:DG) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DG
Name:
DOLLAR GENERAL CORPORATION (XNYS:DG)
Sector:
425.26M
Industry:
Discount Stores
CEO:
Mr. Todd Vasos
Total Employees:
163,000
Our Technological Advancement Rating
Our Rating:
A+
Technological advancement compared to industry is 8645.55% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DOLLAR GENERAL CORPORATION(DG) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DISCOUNT STORES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
242.6
One Month Price Target:
$243.15
Six Month Price Target :
$245.91
Likely Price in One Year's Time:
Ticker:
$249.21
Likely Trading Range Today Under (Normal Volatility)
$242.05
Price Upper limit ($) :
$243.54
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$233.79
This week:
$222.9
This month :
$203.21
Other Primary facts
Market Cap:
54.09B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
225.57M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.71%
-11.11%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$283.43
$264.42
$201.77
$220.78
Medium risk (<10%) entry points
Buy Call
Sell Call
$258.23
Buy Put:
Sell Put:
$254.17
$226.92
$231.03
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DG
Sharpe Ratio:
4.04%
Comparison:
DG, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 74.40% higher than the industry
& ratio is 77.39% higher than the market/S&P 500 average
Average Returns/Yield of
DG
Daily returns:
0.08%
Weekly returns:
0.41%
Monthly returns:
1.64%
Yearly returns:
13.35%
Comparison of returns:
Average annual returns/yield (last 3 years) is 47.30% above industry average
Classification:
DG, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.55
Statistical test of Returns:
DG has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.81%
Weekly Volatility:
4.04%
Monthly Volatility:
8.08%
Yearly Volatility:
28.01%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.25%
Volatility in last five trading days has been -30.89% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.63%
Weekly VaR:
-8.12%
Monthly VaR:
-16.24%
How Much Can the price of
DG
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-13%
Worst case (decline):
-56.25%
This translates to price declining to:
$210.05
This translates to price declining to:
$106.14
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DG is a 14.60% riskier investment compared to the market/S&P 500 & is -1.82% less risky than Nasdaq(IXIC)
Risk (measured by volatility) is -18.80% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DG
Beta in relation to market/S&P 500--0.41
Expected beta in 1 year's time:
0.522
Expected beta in 3 year's time:
0.738
Unlevered (debt free) Beta:
0.157
Beta in relation to Nasdaq (XNAS):
0.462
Beta in relation to all global stocks::
0.341
Beta Comparison & Analysis
Beta of competitors/peers::
0.625
Beta is -35.11% lower than peers
Average Industry Beta:
0.701
Beta is -42.16% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
32.55%
Sustainable growth rate is 67.42% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.137
Alpha is 154.50% above industry average alpha yield
Alpha is 874% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DG
Equity cost of capital:
0.059
Equity cost of capital is -25.46% below industry mean WACC
Unlevered (without debt) cost of capital:
2.29%
Before-tax cost of debt:
1.14%
After-tax cost of debt:
0.90%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.90%
WACC is -46.99% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$152.66
Revenue growth rate per share of (3Y):
8.76
Annual revenue growth rate is 68.37% above the industry average
EPS:
$9.75
Expected Annual growth rate of EPS (3Y):
19.30%
Expected future EPS growth rate is 2.00% higher than the Discount Stores industry
Free cash flow (FCF) per share:
$7.81
Balance sheet equity growth per share: 38.26%
Equity growth rate per share is -65.75% lower than the industry
Debt per share
$55.99
EBITDA per share
$16.40
Valuation Analysis Today of
DG
P/E Ratio:
24.17
P/E Ratio of Competitors/Peers:
23.87
P/E ratio is 1.25% higher than main peers & is 4.18% higher than the industry
Stock price/value with industry average P/E ratio: $226.18
DG is 7.26% overvalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.59
Price to sales ratio is 52.85% above the industry mean
P/B (Price to book value ratio):
8.76
Price to free cash flow: 31.06
Price to free cash flow ratio is -57.70% lower than the industry
Net income growth rate (3Y):
89.61%
Net income growth rate is 81.37% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 4.39%
Dividend yeild: 0.75%
Previous Dividend: $0.55
Previous adjusted dividend: $0.55
Previous Dividend: $1.81
Expected next dividend best case: $0.60
Expected next dividend worst case: $0.50
Average dividend payment (long-term): $0.39
Average dividend increase/decrease (growth rate) % per period: 6.01%
Expected next dividend payment date: 18/07/2022
Expected next dividend record date: 07/04/2022
Expected next dividend declaration date: 14/06/2022
Previous dividend payment date: 19/04/2022
Previous dividend record date: 04/05/2022
Previous dividend declaration date: 16/03/2022
Dividend History:
2022-04-04--$0.55
2021-10-04--$0.42
2021-04-05--$0.42
2022-01-03--$0.42
2021-07-02--$0.42
2021-01-04--$0.36
Dividend growth rate is -86.29% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
202.08%
Net debt to equity ratio:
208.70%
Debt to assets ratio:
50.05%
Net debt to assets ratio:
51.68%
Debt-to-asset ratio is -23.46% below industry average
Ability to repay debt:
Interest coverage ratio:
23.59
Interest coverage ratio is -91.03% less than industry average
Looking forward:
Debt growth rate:
250.56%
Annual debt growth is -96% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.01%
Analysis of Key Statistics
Correlation of price movement with the market:
0.478
Statistical significance of correlation:
DG has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.493
Stock price is -3.00% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.493
Correlation of price movement with Nasdaq (^IXIC):
-0.006
Covariance of price movement with the market:
-0.007
Kurtosis
12.548
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
0.474
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DG
Gross Profit Margin Ratio:
124%
Operating Profit Margin Ratio:
8.88%
Operating profit margin is 73.95% higher than the industry
Net Profit Margin Ratio:
124%
Effective Tax Rate:
21.61%
Effective tax rate is -18.45% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
36.39%
Return on equity (ROE) is 50.62% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
9.01%
Return on assets (ROA) is 15.96% higher than the industry
Financial Leverage:
2.0x
Current Ratio:
1.14
Current ratio is -13.23% below industry average
Cash Conversion Cycle (days):
-33.8
Cash conversion cycle is -167.35% below industry average
The remaining useful life of property plant & equipment is: 0.6 years
Stock based compensation to net income ratio:
1.03%
In-depth Efficiency Analysis
Revenue generated per employee:
211.3K
Each employee generates -43% less revenue than industry average revenue per employee
EBITDA generated per employee:
22.7K
Each employee generates -16% less EBITDA than industry average revenue per employee
Profit generated per employee:
14.0K
Each employee generates -10% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
2.6K
Each employee generates 144% more free cash flow than industry average revenue per employee
Assets/Capital per employee
117.8K
Each employee generates 144% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DG
KEURIG DR PEPPER INC. (XNAS:KDP)
KIMBERLY-CLARK CORPORATION (XNYS:KMB)
STZ-B
GENERAL MILLS, INC. (XNYS:GIS)
SYSCO CORPORATION (XNYS:SYY)
Ambev SA (XNYS:ABEV)
THE HERSHEY COMPANY (XNYS:HSY)
COLGATE-PALMOLIVE COMPANY (XNYS:CL)
ARCHER-DANIELS-MIDLAND COMPANY (XNYS:ADM)
Current Analyst Ratings
Strong buy�25%
Buy�33%
Hold�58%
Sell�0%
Strong sell�8%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
4/29/22
Revenue:
34.44B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
23.78B
10.66B
-
-
7.74B
-
-
7.74B
-
156.81M
641.32M
3.70B
3.06B
2.27B
2.90B
627.03M
2.27B
Statement of Cash Flow
Date:
Period:
154.15M
Differed Income Tax :
58.79M
Stock Based Compensation :
23.53M
Change in Working Capital :
- 224271.00K
Accounts Receivables:
-
Other Working Capital:
113.78M
Other Non-Cash Items:
13.04M
Net Cash Provided by Operating Activities:
702.99M
Investments in PP&E:
- 277730.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
4/30/21
2022
Q1
688.06M
-
688.06M
16.64M
5.10B
237.59M
6.04B
13.61B
4.34B
1.20B
-
-
42.38M
19.19B
-
25.24B
3.29B
1.10B
57.95M
-
919.61M
5.32B
12.63B
271.79M
13.67B
-
18.99B
206.68M
2.59B
- 1921.0K
3.46B
April 30, 2021 at 6:00:00 AM
31.51B
6.25B
25.24B
-
13.73B
13.0B
-
807.00K
- 276923.00K
- 1753.00K
-
- 1000352.00K
- 99832.00K
- 12653.00K
- 1114590.00K
-
- 688522.00K
688.06M
1.38B
702.99M
- 277730.00K
425.26M
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
DG
2023
2024
2025
2026
2027
$295.44
$303.49
$311.76
$320.26
$328.98