Likewise, if a company's revenue and earnings are declining, the value of the company will decrease. If a company's business is growing, the company usually creates value for its shareholders, especially if the growth is profitable. GuruFocus' research has found that growth is closely correlated with the long-term performance of a company's stock. Growth is probably one of the most important factors in the valuation of a company. This is the debt and cash of Dollar General over the past years: Based on this, GuruFocus ranks Dollar General's financial strength as 5 out of 10, suggesting fair balance sheet. Dollar General has a cash-to-debt ratio of 0.10, which ranks worse than 86% of the companies in the industry of Retail - Defensive. Looking at the cash-to-debt ratio and interest coverage can give a good initial perspective on the company's financial strength. Since investing in companies with low financial strength could result in permanent capital loss, investors must carefully review a company's financial strength before deciding whether to buy shares. Link: These companies may deliever higher future returns at reduced risk. Click here to check it out.ĭollar General Stock Shows Every Sign Of Being Fairly Valuedīecause Dollar General is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth, which averaged 16.3% over the past three years and is estimated to grow 3.51% annually over the next three to five years. Warning! GuruFocus has detected 5 Warning Sign with DG. GF Value for Dollar General is shown in the chart below. At its current price of $212.4 per share and the market cap of $50.8 billion, Dollar General stock gives every indication of being fairly valued. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher. If the price of a stock is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor.
It is calculated based on the historical multiples that the stock has traded at, the past business growth and analyst estimates of future business performance. GuruFocus Value is GuruFocus' estimate of the fair value at which the stock should be traded. The stock of Dollar General ( NYSE:DG, 30-year Financials) shows every sign of being fairly valued, according to GuruFocus Value calculation.