SteelPeak Wealth LLC drastically reduced its stake in Dollar General Corporation (NYSE: DG) by an impressive 90.2% during the third quarter of 2023. According to its recent Form 13F filing with the Securities and Exchange Commission (SEC), the firm now holds just 2,340 shares of the retail giant after selling 21,647 shares throughout the quarter. This reduction brings the value of SteelPeak’s holdings in Dollar General to approximately $242,000.
The decision comes amidst a broader trend among institutional investors regarding Dollar General, as several other hedge funds have also adjusted their positions. For instance, Vanguard Group Inc. increased its holdings by 1.5% during the second quarter, acquiring an additional 384,447 shares. Vanguard now owns 26,817,649 shares valued at around $3.07 billion.
Additionally, Arrowstreet Capital Limited Partnership more than doubled its position in Dollar General, increasing its stake by 116.0% to 2,714,972 shares, valued at approximately $310.5 million. Other firms, including Baupost Group LLC and Charles Schwab Investment Management Inc., also boosted their shares, indicating a mixed sentiment among institutional investors.
Dollar General’s Market Performance
On December 4, 2023, Dollar General’s stock opened at $136.55, experiencing a 2.9% rise. The company maintains a debt-to-equity ratio of 0.63 and has a market capitalization of approximately $30.06 billion. Its price-to-earnings (PE) ratio stands at 23.58, with a 52-week range between $66.43 and $139.83.
The company reported strong financial results, with earnings per share (EPS) of $1.28 for the latest quarter, exceeding analysts’ expectations of $0.95 by $0.33. Revenue for the quarter reached $10.65 billion, slightly above the anticipated $10.60 billion. This performance marks a 4.6% increase in revenue compared to the same period last year, showcasing the company’s resilience amidst a challenging retail environment.
Dollar General has also released its fiscal year 2025 guidance, projecting an EPS between $6.300 and $6.500. Analysts currently estimate an EPS of $5.75 for the current fiscal year.
Dividend and Insider Transactions
The company recently announced a quarterly dividend of $0.59 per share, set to be paid on January 20, 2024, to shareholders recorded as of January 6, 2024. This annualizes to $2.36, resulting in a dividend yield of 1.7%. Dollar General’s dividend payout ratio is reported at 40.76%.
In insider news, Executive Vice President Carman R. Wenkoff sold 19,166 shares at an average price of $132.01 on December 11, 2023, totaling around $2.53 million. Following the transaction, Wenkoff’s ownership in the company decreased by 30.74%. Similarly, EVP Bryan D. Wheeler sold 9,776 shares on December 19, 2023, for about $1.32 million, reducing his ownership by 30.48%. Over the past three months, insiders have sold a total of 58,673 shares valued at approximately $7.71 million.
Analysts have varied opinions on Dollar General’s stock. Recently, Wall Street Zen upgraded its rating from “hold” to “buy,” while Weiss Ratings maintained a “hold (c-)” rating. Raymond James Financial reiterated an “outperform” rating with a price objective of $135.00, and Daiwa Capital Markets raised its target price from $113.00 to $130.00. Overall, the consensus rating is “Moderate Buy,” with an average target price of $132.62.
Founded in 1939, Dollar General has established itself as a leading discount retailer, primarily serving rural and suburban communities across the United States. The company offers a wide range of products, including food, household items, and personal care products, making it a staple for many consumers.
