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Should Value Investors Buy Dollar General (DG) Stock?
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality 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) and an A for Value. The stock is trading with P/E ratio of 15.89 right now. For comparison, its industry sports an average P/E of 26.78. DG's Forward P/E has been as high as 19.69 and as low as 11.46, with a median of 13.98, all within the past year.
Investors should also note that DG holds a PEG ratio of 2.05. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DG's PEG compares to its industry's average PEG of 2.55. Within the past year, DG's PEG has been as high as 2.91 and as low as 1.96, with a median of 2.29.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DG has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.15.
Finally, our model also underscores that DG has a P/CF ratio of 10.24. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 27.29. DG's P/CF has been as high as 11.93 and as low as 6.61, with a median of 8.66, all within the past year.
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?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality 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) and an A for Value. The stock is trading with P/E ratio of 15.89 right now. For comparison, its industry sports an average P/E of 26.78. DG's Forward P/E has been as high as 19.69 and as low as 11.46, with a median of 13.98, all within the past year.
Investors should also note that DG holds a PEG ratio of 2.05. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DG's PEG compares to its industry's average PEG of 2.55. Within the past year, DG's PEG has been as high as 2.91 and as low as 1.96, with a median of 2.29.
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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DG has a P/S ratio of 0.62. This compares to its industry's average P/S of 1.15.
Finally, our model also underscores that DG has a P/CF ratio of 10.24. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 27.29. DG's P/CF has been as high as 11.93 and as low as 6.61, with a median of 8.66, all within the past year.
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.