Analyzing Dollar Tree (DLTR) and Its Rivals

Dollar Tree (NASDAQ: DLTR) is one of 12 publicly-traded companies in the “Variety stores” industry, but how does it weigh in compared to its rivals? We will compare Dollar Tree to similar businesses based on the strength of its risk, earnings, dividends, profitability, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

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This is a breakdown of current recommendations for Dollar Tree and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dollar Tree 0 7 19 1 2.78
Dollar Tree Competitors 163 1263 1690 90 2.53

Dollar Tree currently has a consensus price target of $107.64, indicating a potential upside of 9.03%. As a group, “Variety stores” companies have a potential upside of 5.60%. Given Dollar Tree’s stronger consensus rating and higher possible upside, equities analysts plainly believe Dollar Tree is more favorable than its rivals.

Profitability

This table compares Dollar Tree and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dollar Tree 7.71% 18.68% 7.28%
Dollar Tree Competitors 3.76% 15.01% 6.64%

Volatility & Risk

Dollar Tree has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Dollar Tree’s rivals have a beta of 0.89, meaning that their average share price is 11% less volatile than the S&P 500.

Valuation & Earnings

This table compares Dollar Tree and its rivals gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Dollar Tree $22.25 billion $1.71 billion 20.31
Dollar Tree Competitors $65.63 billion $1.74 billion 21.29

Dollar Tree’s rivals have higher revenue and earnings than Dollar Tree. Dollar Tree is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

90.9% of Dollar Tree shares are owned by institutional investors. Comparatively, 76.5% of shares of all “Variety stores” companies are owned by institutional investors. 4.1% of Dollar Tree shares are owned by insiders. Comparatively, 13.9% of shares of all “Variety stores” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Dollar Tree beats its rivals on 8 of the 13 factors compared.

Dollar Tree Company Profile

Dollar Tree, Inc. operates variety retail stores in the United States and Canada. It operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $1.00. It provides consumable merchandise, including candy and food, and health and beauty care products, as well as everyday consumables, such as household paper and chemicals, and frozen and refrigerated food; various merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, and other items; and seasonal goods, which include Valentine's Day, Easter, Halloween, and Christmas merchandise. This segment operates under the under the Dollar Tree and Dollar Tree Canada brands, as well as 11 distribution centers in the United States and 2 in Canada, and a store support center in Chesapeake, Virginia. The Family Dollar segment operates general merchandise discount retail stores that offer consumable merchandise, which comprise food, tobacco, health and beauty aids, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies; and home products, including housewares, home décor, and giftware, as well as domestics, such as blankets, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise, which include Valentine's Day, Easter, Halloween, and Christmas merchandise, as well as personal electronics that comprise pre-paid cellular phones and services, stationery and school supplies, and toys. This segment operates under the Family Dollar brand, 11 distribution centers, and a store support center in Matthews, North Carolina. As of March 1, 2018, the company operated 14,835 stores in 48 states and the District of Columbia, and 5 Canadian provinces. Dollar Tree, Inc. was founded in 1986 and is based in Chesapeake, Virginia.

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