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Should Value Investors Buy Dollar General (DG) Stock?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Dollar General (DG - Free Report) . DG is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.86, which compares to its industry's average of 31.77. Over the past 52 weeks, DG's Forward P/E has been as high as 19.69 and as low as 10.58, with a median of 13.56.
Investors should also note that DG holds a PEG ratio of 2.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DG's industry currently sports an average PEG of 3.80. Over the past 52 weeks, DG's PEG has been as high as 2.91 and as low as 1.68, with a median of 2.27.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DG has a P/S ratio of 0.59. This compares to its industry's average P/S of 0.98.
Finally, we should also recognize that DG has a P/CF ratio of 11.13. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. DG's P/CF compares to its industry's average P/CF of 30.75. Within the past 12 months, DG's P/CF has been as high as 11.93 and as low as 6.61, with a median of 8.19.
These are just a handful of the figures considered in Dollar General's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DG is an impressive value stock right now.
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Should Value Investors Buy Dollar General (DG) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is Dollar General (DG - Free Report) . DG is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 17.86, which compares to its industry's average of 31.77. Over the past 52 weeks, DG's Forward P/E has been as high as 19.69 and as low as 10.58, with a median of 13.56.
Investors should also note that DG holds a PEG ratio of 2.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DG's industry currently sports an average PEG of 3.80. Over the past 52 weeks, DG's PEG has been as high as 2.91 and as low as 1.68, with a median of 2.27.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DG has a P/S ratio of 0.59. This compares to its industry's average P/S of 0.98.
Finally, we should also recognize that DG has a P/CF ratio of 11.13. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. DG's P/CF compares to its industry's average P/CF of 30.75. Within the past 12 months, DG's P/CF has been as high as 11.93 and as low as 6.61, with a median of 8.19.
These are just a handful of the figures considered in Dollar General's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DG is an impressive value stock right now.