Five Below vs Dollar General Which Is More Profitable?

Five Below and Dollar General are two popular discount retail stores that cater to budget-conscious consumers. While both companies offer low-priced products, they have different target markets and business models. Five Below focuses on selling trendy and high-quality items for $5 and below, appealing to younger demographics. On the other hand, Dollar General offers a wider range of products at various price points, serving a more diverse customer base. Investors may compare the stocks of these two companies to assess their growth potential and competitive advantages in the retail industry.

Five Below or Dollar General?

When comparing Five Below 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 Five Below 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. Five Below has a dividend yield of -%, while Dollar General has a dividend yield of 3.87%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Five Below 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 36.63%.

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 Five Below P/E ratio at 16.24 and Dollar General's P/E ratio at 11.85. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Five Below P/B ratio is 2.84 while Dollar General's P/B ratio is 2.31.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Five Below has seen a 5-year revenue growth of 1.29%, while Dollar General's is 0.82%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Five Below's ROE at 18.28% and Dollar General's ROE at 20.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $82.79 for Five Below and $76.08 for Dollar General. Over the past year, Five Below's prices ranged from $64.87 to $216.18, with a yearly change of 233.25%. Dollar General's prices fluctuated between $76.08 and $168.07, with a yearly change of 120.91%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.