Costco Wholesale Corporation (COST) vs Dollar General Corporation (DG)

Costco Wholesale Corporation and Dollar General Corporation are both Discount Stores companies. Costco Wholesale Corporation is the larger, with a market value of $396.7B against $27.2B — 14.6× the size. Dollar General Corporation trades at the lower P/E: 16.2× against 46.3×. Costco Wholesale Corporation grew revenue faster over the last twelve months: 9.23% against 4.77%. Dollar General Corporation has the higher net margin (3.90% vs 3.01%) and the lower return on invested capital (12.4% vs 36.6%). Both pay a dividend; Costco Wholesale Corporation yields more (2.58% vs 1.65%). Across the 23 metrics below, Dollar General Corporation leads on 14 and Costco Wholesale Corporation on 9.

Valuation

Metric COST DG Discount Stores median
P/E 46.30 16.15 19.55
P/S 1.39 0.63 1.08
P/B 12.21 2.97 5.43
Price to free cash flow 46.47 13.66 33.31
EV/EBITDA 28.65 8.66 12.17
EV/Sales 1.35 0.70 1.06
Earnings yield 2.16% 6.19% 3.95%
Free cash flow yield 2.15% 7.32% 2.93%

Profitability

Metric COST DG Discount Stores median
Gross margin 12.88% 31.16% 27.27%
Operating margin 3.82% 5.59% 4.45%
Net margin 3.01% 3.90% 3.01%
Free cash flow margin 3.00% 4.62% 3.30%
Return on equity 29.15% 19.69% 20.83%
Return on assets 10.92% 5.34% 7.60%
Return on invested capital 36.57% 12.43% 13.21%

Growth

Metric COST DG Discount Stores median
Revenue growth (TTM) 9.23% 4.77% 8.64%
EPS growth (last fiscal year) 9.96% 34.05% —
Revenue growth, 5-year CAGR 10.54% 4.83% 4.99%
Net income growth, 5-year CAGR 15.14% (10.65%) 0.00%

Health

Metric COST DG Discount Stores median
Debt to equity 0.17 0.49 0.39
Current ratio 1.07 1.21 1.03
Net debt to EBITDA (0.75) 1.06 0.59

Dividend

Metric COST DG Discount Stores median
Dividend yield 2.58% 1.65% 2.12%
Payout ratio 0.28 0.23 0.24

Size

Metric COST DG Discount Stores median
Market cap 396.68b 27.22b 16.44b

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