Dollar General (NYSE:DG) was one of my new buys for February, and it has already proved its mettle. As I mentioned last month, this company operates just under 10,000 stores in the continental U.S. and has big plans to open an additional 625 stores in 2012.
The interesting thing is that Dollar General is in direct competitor with Dollar Tree (NYSE:DLTR), which I’ll discuss next. However, there are merits to owning both stocks. Currently, both are neck-in-neck in terms of sales growth and operating margins, but Dollar General is slightly larger in terms of market cap. And while Dollar Tree lives up to its name and caps its prices at $1, Dollar General prices its goods at $10 or less. This means that Dollar General carries a wider range of groceries and durable goods, including electronics.
Dollar General is currently slated to announce earnings on March 22, and analysts forecast 17.8% sales growth. The company is also expected to grow earnings by 26.2%, which is almost four times the 6.9% industry average for earnings growth.