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Dollar General (DG) Gains As Market Dips: What You Should Know

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Dollar General (DG - Free Report) closed at $106.16 in the latest trading session, marking a +0.25% move from the prior day. This change outpaced the S&P 500's 0.02% loss on the day. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq lost 0.39%.

Coming into today, shares of the discount retailer had lost 7.36% in the past month. In that same time, the Retail-Wholesale sector lost 2.11%, while the S&P 500 lost 2.56%.

DG will be looking to display strength as it nears its next earnings release, which is expected to be March 21, 2019. On that day, DG is projected to report earnings of $1.94 per share, which would represent year-over-year growth of 31.08%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.62 billion, up 8.06% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.08 per share and revenue of $25.57 billion. These totals would mark changes of +35.41% and +8.96%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for DG. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 1.81% lower. DG is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, DG currently has a Forward P/E ratio of 17.43. This valuation marks a discount compared to its industry's average Forward P/E of 18.85.

We can also see that DG currently has a PEG ratio of 1.22. 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. The Retail - Discount Stores industry currently had an average PEG ratio of 1.49 as of yesterday's close.

The Retail - Discount Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 184, which puts it in the bottom 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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