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Barclays Initiates Coverage of Dollar General With Equal-Weight Recommendation

Fintel Staff

Published: February 10, 2023 3:33 am

Last Updated: February 10, 2023 12:34 pm

On February 8, 2023, Barclays initiated coverage of Dollar General with a Equal-Weight recommendation.

Analyst Price Forecast Suggests 18.20% Upside

As of February 9, 2023, the average one-year price target for Dollar General is $269.08. The forecasts range from a low of $192.91 to a high of $302.40. The average price target represents an increase of 18.20% from its latest reported closing price of $227.64.

The projected annual revenue for Dollar General is $39,096MM, an increase of 7.72%. The projected annual EPS is $11.32, an increase of 9.40%.

Dollar General Declares $0.55 Dividend

On November 30, 2022 the company declared a regular quarterly dividend of $0.55 per share ($2.20 annualized). Shareholders of record as of December 30, 2022 received the payment on January 17, 2023. Previously, the company paid $0.55 per share.

At the current share price of $227.64 / share, the stock’s dividend yield is 0.97%. Looking back five years and taking a sample every week, the average dividend yield has been 0.89%, the lowest has been 0.65%, and the highest has been 1.27%. The standard deviation of yields is 0.15 (n=237).

The current dividend yield is 0.48 standard deviations above the historical average.

Additionally, the company’s dividend payout ratio is 0.21. The payout ratio tells us how much of a company’s income is paid out in dividends. A payout ratio of one (1.0) means 100% of the company’s income is paid in a dividend. A payout ratio greater than one means the company is dipping into savings in order to maintain its dividend – not a healthy situation. Companies with few growth prospects are expected to pay out most of their income in dividends, which typically means a payout ratio between 0.5 and 1.0. Companies with good growth prospects are expected to retain some earnings in order to invest in those growth prospects, which translates to a payout ratio of zero to 0.5.

The company’s 3-Year dividend growth rate is 0.72%, demonstrating that it has increased its dividend over time.

What are large shareholders doing?

Price T Rowe Associates holds 13,549K shares representing 6.06% ownership of the company. In it’s prior filing, the firm reported owning 18,908K shares, representing a decrease of 39.55%. The firm decreased its portfolio allocation in DG by 8.74% over the last quarter.

Capital World Investors holds 9,980K shares representing 4.46% ownership of the company. In it’s prior filing, the firm reported owning 12,967K shares, representing a decrease of 29.94%. The firm decreased its portfolio allocation in DG by 20.52% over the last quarter.

Capital International Investors holds 9,095K shares representing 4.07% ownership of the company. In it’s prior filing, the firm reported owning 9,065K shares, representing an increase of 0.33%. The firm increased its portfolio allocation in DG by 5.13% over the last quarter.

VTSMX – Vanguard Total Stock Market Index Fund Investor Shares holds 6,727K shares representing 3.01% ownership of the company. In it’s prior filing, the firm reported owning 6,737K shares, representing a decrease of 0.14%. The firm increased its portfolio allocation in DG by 1.72% over the last quarter.

VFINX – Vanguard 500 Index Fund Investor Shares holds 5,146K shares representing 2.30% ownership of the company. In it’s prior filing, the firm reported owning 5,064K shares, representing an increase of 1.59%. The firm increased its portfolio allocation in DG by 2.69% over the last quarter.

What is the Fund Sentiment?

There are 2171 funds or institutions reporting positions in Dollar General. This is an increase of 13 owner(s) or 0.60% in the last quarter. Average portfolio weight of all funds dedicated to DG is 0.51%, an increase of 3.39%. Total shares owned by institutions decreased in the last three months by 0.72% to 241,369K shares. The put/call ratio of DG is 0.91, indicating a bullish outlook.

Dollar General Background Information
(This description is provided by the company.)

Dollar General Corporation has been delivering value to shoppers for more than 80 years. Dollar General helps shoppers Save time. Save money. Every day.® by offering products that are frequently used and replenished, such as food, snacks, health and beauty aids, cleaning supplies, basic apparel, housewares and seasonal items at everyday low prices in convenient neighborhood locations. Dollar General operated 16,979 stores in 46 states as of October 30, 2020. In addition to high-quality private brands, Dollar General sells products from America’s most-trusted manufacturers such as Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg’s, General Mills, and PepsiCo.

This article originally appeared on Fintel