Dollar General Corporation (NYSE:DG) and Dollar Tree Inc (NASDAQ:DLTR) are two very similar brands. They both serve the cost-conscious customer. Dollar Tree serves the market for products priced below $1. Dollar General is a discount store. As bargain-hunting intensifies, the two companies expect strong growth. Investors will be tapping into the growth.
Dollar General is trading at $243. The company has an EPS of $9.81 and a PE of 24.66. Additionally, Dollar General has a dividend yield of 0.90% paid from the ROE of 37.25%. The ROA is 8.71%. DG is rated hold by Zacks Research.
Dollar Tree has a lower price at $155. The EPS of $6.60 is also lower. The forward PE is 23.61, and the company does not pay regular dividends. The return on equity is 19.04%, while the ROA is 6.86%. DLTR is rated a strong buy by Zacks Research.
Dollar General has superior returns compared to Dollar Tree
Source – TradingView
The performance of the shares in the capital markets is one factor that differentiates the two companies. The returns on Dollar General shares since 2019 are 119%. Dollar Tree gained 79% over the same period. Dollar General did not just post higher returns. Instead, the stock ensured that the returns remained dominantly higher. That makes Dollar General most attractive.
Summary
Dollar General is a better buy compared to Dollar Tree. Dollar General has superior returns on equity both fundamentally and technically. The difference in PE ratios is considered subtle.
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