Dollar General Stock Analysis

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Dollar General Stock Analysis

Dollar General (Dg): A Stock With Below Average P/E Ratio

Many investors prefer to pick stocks with a strong growth potential but a low P/E ratio. One such stock is Dollar General (DG), which is a big-name US retailer.

Dollar General (DG) has 20,000 stores, making it the biggest discount retailer in the country. Most of the stores are in rural areas and small towns.

Dollar General'S P/E Ratio Is 17.5

In the last year, the stock of Dollar General has jumped by 46% while its P/E ratio is still only 17.51. So, such a low P/E ratio makes the Dollar General stock a very attractive option for investors.

The business model of the company is to offer a number of low-cost household items. This includes apparel basics, health products, packaged food, and so on. In a sense, Dollar General provides low-cost items which can be helpful for those in tough economic conditions.

The valuation of Dollar General (DG) looks very attractive, but there are also more reasons which make it great. For starters, Dollar General is taking measures to improve its margins and has also improved store efficiency.

The company is now also expanding into the healthcare and fresh food categories. This move will allow Dollar General to drive more foot traffic and even generate more repeat purchases.

The data from the recent month shows that this move has also translated into higher earnings for the Dollar General stock.

The net sales and even operating profits have improved when compared with the previous year. This is a sign that Dollar General is gaining momentum, which will also translate into a higher share price.

Also, the low P/E ratio of Dollar General is a sign that it is not in any sort of bubble. So, the path of least resistance for Dollar General stock is upside.

The only concern for Dollar General would be that the US economy starts to improve. In that case, the customers would prefer to spend money on high-end stores.

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