This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Dollar General Rallies New Troops - Research Report On Dollar General Corp.

NEW YORK, January 24, 2013 /PRNewswire/ --

The recently concluded fiscal cliff deal will present challenges to certain retail establishments including dollar stores like Dollar General Corp. (NYSE:DG) [ Full Research Report] [ 1 ] due to the imposed tax hikes for the rich and middle class. The deal says Americans will be paying two percent more in payroll taxes.

Morgan Stanley says the drag from higher taxes will extend outside discount retailers, particularly to department stores and specialty-retail stocks. A Bloomberg BusinessWeek report says an average Dollar General customer earning $40,000 annually will be required to pay out $800 in additional taxes, or $15 a week.

"Dollar stores" were seen to prosper during the recent economic downturn, even getting to steal away some Wal-Mart customers at one point. Increasing customers led them to add mid- to high-margin items later on resulting in increased sales at an average of 5.5 percent in a span of 13 months.

However, customers preferred the lower margin merchandise. Dollar General was forced to place discounts, resulting in a 0.8 percent decrease earlier this month to $43.

Nevertheless, the company is still posting profit at $208 million in net income and sales of $3.96 billion in the third quarter of 2012. Investment Contrarians still regard the firm's stock as a "buy," saying Dollar General has "reasonable valuation" and "above average long-term price appreciation potential."

The forecast for the final quarter of the fiscal year, is expected to be "flattish" and will continue to roll out low-margin items over higher-end items to "weigh on profit" in 2013, according to Bloomberg. Store sales meanwhile are expected to be comparable, with increases by 3 to 4 percent.

Stock quotes in this article: DG 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs