Dollar Tree

Sell Costco to buy DLTR? Costco is very well run, but their challenge is always growth. And their forward PE is 35x, which is high. Whereas DLTR trades at 17x, driven by growth and expansion. Long-term, DLTR has earnings growth and multiple expansion and a better total return over 5-7 years than Costco.

DLTR vs. DG Likes the dollar store trade in general. Prefers DG, as it benefits from being in rural areas, away from the Targets and Walmarts. DLTR has a lot of urban competition. In the next 3-5 years, he prefers DG.

(A Top Pick Dec 12/19, Up 16%) She would buy it again. They are reformatting some of the stores and this improves basket size. It trades at a discount to Dollar General and Dollarama.

Plays well into what's happening with the pandemic and changes in consumer behaviour. Prefers Dollar General, as it's in rural areas, with no Walmarts or Costcos. DLTR has lots of competition in the city and its latest acquisition hasn't worked out well. 9% earnings growth rate, while Dollar General has 13-14% earnings growth rate.

Stockchase Research Editor: Michael O'Reilly DLTR has seen its fair share of volatility lately, but the market fundamentals are once again moving in its favour. As the economy is about to face another wave of the pandemic folks will be likely be tempered in their spending and this benefits the company. Ahead of the season's demand rush, the company has hired 25,000 employees showing their outlook for sales ahead. Moody's just upgraded their credit rating based on their ability to boost cash flow during the pandemic and double-digit same store sales growth. It is also relatively cheap compared to DG, who has a PE of 20 versus 15 for DLTR. We would trade this with a $73 stop-loss. Yield 0% (Analysts’ price target is $108.17)

They bought Family Dollar in 2015 but had problems integrating it, but it did double the size of DLTR. They have since integrated. DLTR trades at a discount to peers including Dollarama. It's attractively valued and resistant to a recession.

DOL vs Dollar Tree vs. Dollar General He likes Dollar General for its location and execution. Doesn't like Dollar Tree because their locations are in urban centres where there's too much competition. He prefers Dollarama over Dollar General, but likes DOL, but many DOL stores are inside malls, which is a problem now (malls are closed). He prefers DOL to Dollar Tree because they execute better; and Dollar General over Dollar Tree.

They are more insulated from online competition like Amazon. They have addressed some short term issues and it is well positioned regardless of the economic environment. Yield 0% (Analysts’ price target is $88.05)

DLTR vs. DG DLTR is in urban areas, with lots of competitors. Dollar General is in low population areas. A bit cheaper than Dollar General, but you have to look at the growth rate. Growth rate is in mid-single digits, but Dollar General is in low double digits. If you look at the PEG ratio, Dollar General is still cheaper. Dollarama is also an option. (Analysts’ price target is $101.00)