Buying Dollar General Stock Could Be a Genius Move
With its stock up 5% year to date, Dollar General (NYSE: DG) has ducked the worst effects of the bear market that has sent the S&P 500 down 21% in 2022. The company's focus on low-priced staples give it an edge in this challenging macroeconomic environment. And recent legal challenges look unlikely to derail its trajectory. Let's dive in.
Founded in 1939, Dollar General is a relatively mature company, so investors shouldn't expect sustained breakneck growth. But second-quarter earnings show that business is holding up well in this challenging macroeconomic environment. Net sales jumped 9% to $9.4 billion, driven by the revenue from new stores. The company opened 227 locations in the period, bringing its total to 18,566 as of July.
With 60% of economists surveyed in a Bloomberg poll expecting the U.S. economy to enter a recession in the next 12 months, the near term will be challenging for many retail companies. But according to Dollar General CEO Todd Vasos, "We do very good in good times and we do fabulous in bad times." The company's discount business model and focus on everyday needs in rural areas and underserved communities should help shield it from a downturn.
Source Fool.com
