Dollar Tree, Inc. operates discount variety retail stores. The company operates in two segments, Dollar Tree and Family Dollar. The Dollar Tree segment offers merchandise at the fixed price of $ 1.25. It provides consumable merchandise, which includes everyday consumables, such as household paper and chemicals, food, candy, health, personal care products, and frozen and refrigerated food; variety merchandise comprising toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines, arts and crafts supplies, and other items; and seasonal goods that include Christmas, Easter, Halloween, and Valentine's Day merchandise. It operates stores under the Dollar Tree and Dollar Tree Canada brands, as well as distribution centers in the United States and Canada. The Family Dollar segment operates general merchandise retail discount stores that offer consumable merchandise, which comprise food and beverages, tobacco, health and personal care, 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 comforters, sheets, and towels. It also provides apparel and accessories merchandise comprising clothing, fashion accessories, and shoes; and seasonal and electronics merchandise that include Christmas, Easter, Halloween, and Valentine's Day merchandise, as well as personal electronics, which comprise pre-paid cellular phones and services, stationery and school supplies, and toys. The company was founded in 1986 and is based in Chesapeake, Virginia.
Discounted Cash Flow Valuation of Dollar Tree, Inc.
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +3.37%.
The trend of Net Margin over the past 5 years is +0.79%.
The average ROA over the past 5 years is +6.48%.
The trend of ROA over the past 5 years is +1.03%.
The average ROE over the past 5 years is +10.5%.
The trend of ROE over the past 5 years is +3.27%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 6.55.
The trend of Debt/FCF over the past 5 years is 0.50.
Graham’s Stability measure stands at -1.65.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +4.96%.
The trend of Revenue growth rate over the past 5 years is -4.91%.
The Earnings CAGR over the past 5 years is -1.18%.
The trend of Earnings growth rate over the past 5 years is -1.91%.
The Equity CAGR over the past 5 years is +4.03%.
The trend of Equity growth rate over the past 5 years is -10.22%.
The FCF CAGR over the past 5 years is -16.05%.
The trend of FCF growth rate over the past 5 years is -8.97%.