#7 - Dollar General (NYSE:DG)
Inflation and rising interest rates are whacking consumers in several ways. Still, data shows that consumers continue to spend on staple items. Nevertheless, they'll still be looking for bargains, which means looking for discount retailers.
That bodes well for Dollar General, Inc. (NYSE: DG). Like many retail stocks, DG stock has been battered in 2023. It's currently down 57%, and its earnings are down YOY for the last two quarters. But at 13.8x forward earnings, this seems to be a case of a stock that is simply oversold.
Issues like retail theft and lower total spending by consumers may continue to weigh on retailers. However, Dollar General has a business model that keeps stores in strategic areas not serviced by big box retailers. That may allow it to capture the thrifty consumer who is looking to save on both gas and groceries. Plus, the company continues to build new stores and renovate existing ones.
About Dollar General
Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine.
More about Dollar General- Current Price
- $93.15
- Consensus Rating
- Hold
- Ratings Breakdown
- 10 Buy Ratings, 14 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $94.75 (1.7% Upside)
The resumption of student loan payments is another headwind in a market that doesn't need any more of them. In fact, many stocks are trading at their lowest level since October 2022. But investors would do well to remember what happened in early 2023. The market turned around. And investors who weren't in the market at that time missed the largest gains of the year.
With that said, you know there are no guarantees in the market. But understanding where opportunities may be can help position you for what's to come. For example, investors who bought energy stocks earlier this year are reaping the benefits right now.
It's too early to tell if the same growth will happen with the stocks in this presentation, but there are reasons to believe they may. And now is the time to add them to your watchlist or even to start building a position as your circumstances allow.
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