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Dividend stocks are your best friend if you're looking to compound your money safely without worrying about the massive downside risk that often comes with buying into high-flying tech or growth stocks. However, not all dividend payers are boring old companies with no potential for capital appreciation.
Dollar Tree could be the biggest beneficiary as 99 Cents Only Stores closes about 400 locations, Jefferies says.
A soft fourth quarter doesn't affect the longer term story for Dollar General. The company is expanding its store base, its product lineup, and stands to benefit from a struggling competitor.
If you're looking for undervalued stocks, you don't have to look far, despite the rally. The past year or so has been a wild rollercoaster ride for investors.
Sales have been languishing. Dollar General's margin has contracted.
Despite Dollar General YTD outperformance (+8% versus +7% for the S&P 500), a gradual recovery closer to historical margins over the long term could still yield +20% upside potential. The market seems to be overemphasizing short-term headwinds and failing to properly price in Dollar General's potential. At current prices, Dollar General is priced at historical CPI growth on margins below the historical average in the long term. Terminal growth also falls short of historical same-store sales.
In uncertain macroeconomic climates, conscious consumers try to stretch their dollars at dollar stores. These microenvironments should be strong drivers for these discount retail sector stocks.
Dollar General topped last quarter's estimates and offered better-than-expected 2024 guidance. Its shares fell on the news anyway, suggesting investors expected a more encouraging outlook.
Dollar General is pulling back on self-checkout as it tries to curtail retail theft across its stores.
Top calls today are Dollar General, Rivian and Discover.