Dollar General Corporation (NYSE: DG) and Family Dollar Stores (NYSE:FDO) are both retail/wholesale companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Dollar General Corporation and Family Dollar Stores, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dollar General Corporation 2 13 8 0 2.26
Family Dollar Stores 0 0 0 0 N/A

Dollar General Corporation presently has a consensus price target of $80.60, indicating a potential upside of 3.77%. Given Dollar General Corporation’s higher possible upside, equities research analysts clearly believe Dollar General Corporation is more favorable than Family Dollar Stores.

Dividends

Dollar General Corporation pays an annual dividend of $1.04 per share and has a dividend yield of 1.3%. Family Dollar Stores does not pay a dividend. Dollar General Corporation pays out 23.5% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Dollar General Corporation and Family Dollar Stores’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Dollar General Corporation $22.33 billion 0.95 $2.45 billion $4.43 17.53
Family Dollar Stores N/A N/A N/A N/A N/A

Dollar General Corporation has higher revenue and earnings than Family Dollar Stores.

Profitability

This table compares Dollar General Corporation and Family Dollar Stores’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dollar General Corporation 5.53% 23.07% 10.66%
Family Dollar Stores 2.93% 17.69% 8.08%

Insider and Institutional Ownership

89.0% of Dollar General Corporation shares are owned by institutional investors. 0.2% of Dollar General Corporation shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Dollar General Corporation beats Family Dollar Stores on 9 of the 10 factors compared between the two stocks.

Dollar General Corporation Company Profile

Dollar General Corporation is a discount retailer. The Company offers a selection of merchandise, including consumables, seasonal, home products and apparel. The Company’s consumables category includes paper and cleaning products (such as paper towels, bath tissue, and other home cleaning supplies); packaged food (such as cereals, spices, sugar and flour); perishables (such as milk, beer and wine); snacks (such as candy, cookies, and carbonated beverages); health and beauty (such as over-the-counter medicines and personal care products); pet (pet supplies and pet food), and tobacco products. Its seasonal products include decorations, toys, batteries, stationery, prepaid phones and accessories, and home office supplies. Its home products include cookware, craft supplies and kitchen, and bed and bath soft goods. Its apparel products include casual everyday apparel for infants, toddlers, girls, boys, women and men, as well as socks, underwear, disposable diapers, shoes and accessories.

Family Dollar Stores Company Profile

Family Dollar Stores, Inc. operates a chain of retail stores. The Company offers a range of merchandise for the whole family, ranging from household cleaners to name brand foods, from health and beauty aids to toys, and from apparel for every age to home fashions. The Company has approximately 10 distribution centers for its supply chain management. The Company has over 8,000 stores within its approximately 50 state operating area. The Company’s subsidiary, Family Dollar Trucking, Inc., services Family Dollar Stores located in southeastern states with localized operations at the corporate fleet offices. The Company offers various categories of products, such as food and beverages, household products, family apparel, personal beauty and care, pet supplies, home decor, electronics, baby care, automotive, hardware, health and wellness, mobile phones, candy, toys and outdoor. The Company’s other product categories include Halloween, Game Day, Holiday, Valentine’s Day and Easter.

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