Analyzing Dollar General Corporation (DG) & Burlington Stores (BURL)

Burlington Stores (NYSE: BURL) and Dollar General Corporation (NYSE:DG) are both mid-cap retail/wholesale companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, analyst recommendations, institutional ownership, dividends, valuation and profitability.

Insider and Institutional Ownership

90.5% of Dollar General Corporation shares are held by institutional investors. 2.6% of Burlington Stores shares are held by insiders. Comparatively, 0.2% of Dollar General Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Burlington Stores and Dollar General Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Burlington Stores $5.75 billion 1.06 $599.05 million $3.61 24.87
Dollar General Corporation $22.77 billion 0.93 $2.44 billion $4.43 17.53

Dollar General Corporation has higher revenue and earnings than Burlington Stores. Dollar General Corporation is trading at a lower price-to-earnings ratio than Burlington Stores, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Burlington Stores and Dollar General Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Burlington Stores 0 3 12 0 2.80
Dollar General Corporation 1 10 7 0 2.33

Burlington Stores presently has a consensus price target of $105.38, indicating a potential upside of 17.38%. Dollar General Corporation has a consensus price target of $79.24, indicating a potential upside of 2.03%. Given Burlington Stores’ stronger consensus rating and higher probable upside, analysts clearly believe Burlington Stores is more favorable than Dollar General Corporation.

Volatility & Risk

Burlington Stores has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Dollar General Corporation has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Dividends

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

Profitability

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

Net Margins Return on Equity Return on Assets
Burlington Stores 4.46% -330.30% 10.19%
Dollar General Corporation 5.38% 22.67% 10.49%

Summary

Dollar General Corporation beats Burlington Stores on 9 of the 16 factors compared between the two stocks.

About Burlington Stores

Burlington Stores, Inc. is a retailer of branded apparel. As of January 28, 2017, the Company operated 592 retail stores, inclusive of an Internet store, in 45 states and Puerto Rico. Its product categories include coats, women, men, juniors, girls, boys, shoes, handbags and accessories, beauty and fragrance, home and toys. The product categories for coats include women’s coats and jackets, men’s coats and jackets, juniors coats and jackets, girls coats and jackets, boy’s coats and jackets, baby girl coats and jackets, and baby boy coats and jackets. The product categories for women include active wear, bottoms, coats and jackets, dresses, tops, scrubs, suit and suit separates, sweaters, swimwear and cover-ups. It also includes accessories, beauty and fragrance, handbags, jewelry, shoes and watches. The product categories for men include accessories, active wear, casual button down shirts, dress shirts, men’s coats jackets, fleece, graphic tees, hoodies and sweatshirts, and jeans.

About Dollar General Corporation

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.

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