Dollar Tree vs Dollar General Which Is Superior?

Dollar Tree and Dollar General are two popular discount retail chains that cater to budget-conscious consumers seeking value-priced merchandise. Both companies have seen steady growth in recent years, but there are significant differences in their stock performance and overall financial health. Dollar Tree has a focus on selling all items for $1 or less, while Dollar General offers a wider range of prices. Investors should carefully evaluate the strengths and weaknesses of each company before making investment decisions.

Dollar Tree or Dollar General?

When comparing Dollar Tree and Dollar General, 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 Tree and Dollar General.

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 Tree has a dividend yield of -%, while Dollar General has a dividend yield of 3.07%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Dollar Tree reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%. On the other hand, Dollar General reports a 5-year dividend growth of 9.39% year and a payout ratio of 38.84%.

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 Tree P/E ratio at -14.43 and Dollar General's P/E ratio at 12.67. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Dollar Tree P/B ratio is 1.97 while Dollar General's P/B ratio is 2.30.

Growth Investors:

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

Retail Investors:

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