Dollar General is a discount retailer, offering a selection of merchandise, including consumables, seasonal, home products and apparel across the U.S. The company was founded in 1939 and is based in Goodlettsville, Tennessee.
DG Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Dollar General Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Dollar General Corp ranked in the 52th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 29%. In terms of the factors that were most noteworthy in this DCF analysis for DG, they are:
The company's debt burden, as measured by earnings divided by interest payments, is 26.09; that's higher than 88.17% of US stocks in the Consumer Defensive sector that have positive free cash flow.
Dollar General Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 18.33% of tickers in our DCF set.
DG's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 18.33% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
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