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Here's How Much a $1000 Investment in Dollar General Made 10 Years Ago Would Be Worth Today

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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Dollar General (DG - Free Report) ten years ago? It may not have been easy to hold on to DG for all that time, but if you did, how much would your investment be worth today?

Dollar General's Business In-Depth

With that in mind, let's take a look at Dollar General's main business drivers.

Founded in 1939 and headquartered in Goodlettsville, Tennessee, Dollar General Corporation is one of the largest discount retailers in the United States. The company trades in low priced merchandise typically $10 or less.

The company offer a wider selection of merchandise, including consumable items, seasonal items, home products and apparel. The company's merchandise comprises national brands from leading manufacturers, as well as own private brand selections with prices at substantial discounts to national brands.

The company sells products from America's renowned manufacturers such as Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg's, General Mills, and PepsiCo.

As of Apr 30, 2021, Dollar General operated approximately 17,426 stores across 46 states. It offers general merchandise under four categories, namely, Consumables, Seasonal, Home products and Apparel.

The Consumables Category (76.8% of Fiscal 2020 Sales) is the leading one, consisting of cleaning products, health & beauty products, snacks, perishables, packaged food and pet supplies and food.

The Seasonal Products (12.1% of Fiscal 2020 Sales) Category consists of prepaid phones and accessories, small electronics, batteries, toys, greeting cards, hardware, decorations, automotive gardening supplies, stationery and home office supplies.

The Home products Category (6.5% of Fiscal 2020 Sales) includes kitchen supplies, candles small appliances, light bulbs, cookware, frames, craft supplies, bed & bath soft goods and storage containers.

The Apparel Category (4.6% of Fiscal 2020 Sales) offers casual daily wear for infants, children, girls, boys, women and men, along with socks, intimate wear, disposable diapers, accessories and shoes.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Dollar General ten years ago, you're likely feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in June 2011 would be worth $6,220.06, or a 522.01% gain, as of June 22, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 226.11% and the price of gold went up 10.57% over the same time frame.

Analysts are anticipating more upside for DG.

Shares of Dollar General have risen in the past three months. The company posted better-than-expected first-quarter fiscal 2021 results, despite a challenging backdrop. We note that the government stimulus payment favorably impacted the performance. While the top line fell marginally, the bottom-line grew year over year. Markedly, the company registered net sales growth in non-consumable categories and witnessed gross margin expansion. Following a stellar start, the company raised fiscal 2021 view. However, management cautioned that there remains significant uncertainty related to the severity and duration of the ongoing pandemic. Again, the company may face tough year-over-year comparisons in consumables category, as COVID-19 benefits are lapped. Also, the impact of any deleverage in SG&A rate and incremental wages on margins cannot be ignored.

Over the past four weeks, shares have rallied 8.53%, and there have been 25 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

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