Dollar General (DG) Stock Rating Lowered by Zacks Investment Research

Zacks Investment Research downgraded shares of Dollar General (NYSE:DG) from a buy rating to a hold rating in a report published on Friday.

According to Zacks, “Shares of Dollar General have showcased a bullish run in a year and outpace the broader sector. The stock has the potential to scale higher with solid prospects, brand recognition and earnings outlook likely to act as propellants. The second-quarter fiscal 2018 performance is the testimony of the same. The company’s commitment toward better pricing, private label offering, effective inventory management, and merchandise and operational initiatives should drive sales and margins. These along with a compelling store growth story at convenient locations and focus on consumable products lend the company an edge. However, any deleverage in SG&A rate owing to higher labor expenses, occupancy costs and utilities expenses might impact margins. Moreover, increasing threat from online retailers on parameters such as same-day delivery and pricing cannot be ignored. Not to forget, a cut in SNAP benefit may also weigh on the performance.”

Several other research analysts have also issued reports on DG. Raymond James raised Dollar General from an outperform rating to a strong-buy rating in a research report on Friday, June 22nd. Northcoast Research reaffirmed a neutral rating on shares of Dollar General in a research report on Tuesday, June 26th. Credit Suisse Group raised their target price on Dollar General from $93.00 to $99.00 and gave the stock a neutral rating in a research report on Friday, June 29th. Citigroup assumed coverage on Dollar General in a research report on Friday, July 6th. They set a buy rating for the company. Finally, ValuEngine raised Dollar General from a hold rating to a buy rating in a research report on Saturday, August 18th. One analyst has rated the stock with a sell rating, nine have issued a hold rating, fifteen have given a buy rating and one has issued a strong buy rating to the stock. Dollar General has an average rating of Buy and a consensus price target of $105.30.

Shares of DG opened at $103.76 on Friday. Dollar General has a 52 week low of $78.83 and a 52 week high of $112.59. The firm has a market capitalization of $29.02 billion, a PE ratio of 23.11, a PEG ratio of 1.32 and a beta of 0.93. The company has a debt-to-equity ratio of 0.44, a current ratio of 1.55 and a quick ratio of 0.21.

Dollar General (NYSE:DG) last announced its quarterly earnings results on Thursday, August 30th. The company reported $1.52 EPS for the quarter, beating the Zacks’ consensus estimate of $1.49 by $0.03. Dollar General had a return on equity of 23.51% and a net margin of 7.06%. The company had revenue of $6.44 billion during the quarter, compared to analysts’ expectations of $6.38 billion. During the same period in the prior year, the company earned $1.10 EPS. Dollar General’s revenue was up 10.6% compared to the same quarter last year. As a group, analysts expect that Dollar General will post 6.1 EPS for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, October 23rd. Shareholders of record on Tuesday, October 9th will be issued a dividend of $0.29 per share. The ex-dividend date of this dividend is Friday, October 5th. This represents a $1.16 dividend on an annualized basis and a yield of 1.12%. Dollar General’s payout ratio is currently 25.84%.

In other Dollar General news, EVP Robert D. Ravener sold 22,440 shares of the stock in a transaction dated Friday, September 7th. The stock was sold at an average price of $111.49, for a total transaction of $2,501,835.60. Following the completion of the sale, the executive vice president now directly owns 50,747 shares in the company, valued at approximately $5,657,783.03. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Company insiders own 0.41% of the company’s stock.

A number of institutional investors have recently modified their holdings of the business. Visionary Asset Management Inc. acquired a new stake in Dollar General during the 3rd quarter worth about $221,000. Windsor Group LTD grew its stake in shares of Dollar General by 50.4% in the 3rd quarter. Windsor Group LTD now owns 7,134 shares of the company’s stock valued at $780,000 after buying an additional 2,390 shares during the period. Franklin Street Advisors Inc. NC grew its stake in shares of Dollar General by 59.5% in the 3rd quarter. Franklin Street Advisors Inc. NC now owns 99,091 shares of the company’s stock valued at $10,831,000 after buying an additional 36,961 shares during the period. Verde Servicos Internacionais S.A. acquired a new stake in shares of Dollar General in the 3rd quarter valued at about $3,676,000. Finally, Northwest Bancshares Inc. grew its stake in shares of Dollar General by 19.1% in the 3rd quarter. Northwest Bancshares Inc. now owns 16,568 shares of the company’s stock valued at $1,811,000 after buying an additional 2,661 shares during the period. Hedge funds and other institutional investors own 95.00% of the company’s stock.

Dollar General Company Profile

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States. The company offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, and laundry and other home cleaning supplies; packaged food comprising cereals, canned soups and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine.

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