Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, discount variety store operator Dollar Tree (Nasdaq: DLTR ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Dollar Tree's business and see what CAPS investors are saying about the stock right now.
Dollar Tree facts
| Headquarters (Founded) | Chesapeake, Va. (1986) |
| Market Cap | $9.04 billion |
| Industry | General merchandise stores |
| Trailing-12-Month Revenue | $6.41 billion |
| Management | CEO Bob Sasser (since 2004) CFO Kevin Wampler (since 2008) |
| Return on Equity (Average, Past 3 Years) | 27.7% |
| Cash/Debt | $280.2 million / $265.5 million |
| Competitors | Dollar General (NYSE: DG ) Family Dollar Stores (NYSE: FDO ) Wal-Mart Stores (NYSE: WMT ) |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 92% of the 444 members who have rated Dollar Tree believe the stock will outperform the S&P 500 going forward. These bulls include tbonci and All-Star investinggenius.
This past summer, tbonci noted that Dollar Tree "has a very successful business model with a huge chunk of market share." Our CAPS member concludes: "They have consistently high returns, and with the recession, the stigma of shopping at a dollar store is being constantly eroded."
Over the next five years, in fact, Dollar Tree is expected to grow its bottom line at a brisk rate of 19% annually. That's faster than that of discount rivals like Dollar General (17%), Family Dollar (15%), and Wal-Mart (10%).
CAPS All-Star investinggenius elaborates on the bull case:
Dollar Tree's commitment to keeping prices low and stocking only items a dollar or less in its stores resonates with people struggling. ... It seems safe to say that this stock is a fair bet as benefiting from the recession and the frugal chic that's popular now may help it once the recession ends. ... [S]hould win the loyalty of some customers even after this recession lifts and I feel that it is a safe stock during a good economy and a great stock for a down economy.
What do you think about Dollar Tree, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
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