Dollar General vs Dollar Tree Which Is Stronger?

Dollar General and Dollar Tree are two of the biggest players in the discount retail industry, offering a wide range of affordable products to consumers. While both companies operate in the same market, their stocks differ in performance and investment potential. Dollar General has shown steady growth and profitability over the years, making it a more attractive option for investors looking for stability. On the other hand, Dollar Tree has faced challenges and fluctuations in stock value, making it a riskier investment choice.

Dollar General or Dollar Tree?

When comparing Dollar General and Dollar Tree, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Dollar General and Dollar Tree.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Dollar General has a dividend yield of 3.07%, while Dollar Tree has a dividend yield of -%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Dollar General reports a 5-year dividend growth of 9.39% year and a payout ratio of 38.84%. On the other hand, Dollar Tree reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Dollar General P/E ratio at 12.67 and Dollar Tree's P/E ratio at -14.43. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Dollar General P/B ratio is 2.30 while Dollar Tree's P/B ratio is 1.97.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Dollar General has seen a 5-year revenue growth of 0.82%, while Dollar Tree's is 0.45%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Dollar General's ROE at 18.85% and Dollar Tree's ROE at -14.09%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $75.61 for Dollar General and $69.12 for Dollar Tree. Over the past year, Dollar General's prices ranged from $72.12 to $168.07, with a yearly change of 133.04%. Dollar Tree's prices fluctuated between $60.49 and $151.22, with a yearly change of 149.99%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.