Dollar General (NYSE:DG) is a discount retailer in the U.S. that has been thriving on the wave of self-imposed frugality we’ve seen in the last several years.
Cost-conscious customers are watching their wallets closely, and their dollars go further at Dollar General. The company’s stores offer a big variety of products — from paper towels, trash bags, cleaning supplies, packaged foods, salty snacks, over-the-counter medications, pet supplies, seasonal products, kitchen supplies, small appliances as well as apparel for every member of the family. And the best part is that all of these products are mostly priced at $10 or less.
The company currently operates about 9,800 stores in 38 states and has big expansion plans this year that will serve as a near-term catalyst. Dollar General expects to open 625 new stores in 2012 and create 6,000 new jobs. Plus, the company has done a lot of work redesigning its current stores to make sure customers are able to get in and get out quickly with what they need.
In DG’s latest earnings call in early December, the company reported its third quarter of accelerated growth. And as a result of its strong November sales, the company raised its full-year earnings guidance to a range of $2.29 to $2.32 — up from the previously expected range of $2.22 to $2.30. Dollar General also announced a $500 million stock buyback program that bodes well for shares going forward in 2012.
The analyst community is expecting that Dollar General’s latest quarterly sales will rise 17.8% and that its earnings will rise 26.2% to 82 cents per share.
Fastenal (NASDAQ:FAST) is a “nuts and bolts” store. Essentially, what Amazon (NASDAQ:AMZN) is to retail shoppers, Fastenal is to businesses that need all kinds of specialty equipment and parts.
In fact, the company’s 2,500 stores offer 395,054 items for sale! — from nuts, bolts, rivets, screws, anchors, plumbing, hydraulic items and gobs of other equipment and accessories. The company has a reputation of a “can-do” supplier for contractors, engineers, repair shops, plumbers, welders and any number of other specialized industrial workers. Plus, Fastenal operates testing labs, custom manufacturing and inventory services to help customers’ operations run more smoothly and reduce related waste.
Earlier this month, the company announced its Q4 sales rose 22% to $697.8 million — compared with $573.8 million in the same quarter a year ago. During the same period, Fastenal’s earnings rose 34% to $87.5 million, or 30 cents per share — compared with $65.2 million or 22 cents per share. The analyst community was expecting $695.6 million in sales and earnings of 30 cents per share, so the company largely matched the consensus estimate. Looking ahead, Fastenal expects to increase its new store openings by 4% to 6% in 2012.
Right now, Fastenal is benefiting from increasing business spending.
W.W. Grainger (NYSE:GWW) is our third new buy recommendation this month. Like Fastenal, Grainger’s industrial supply stores are strongly benefiting from increased business spending, and the company also is seeing a solid boost in overall sales due to its presence in China, India and Latin America.
And although Grainger operates in the same industry as Fastenal, they often aren’t quite head-to-head competitors as you might expect. In fact, both companies are growing market share — at the expense of smaller players in the market. In addition, Grainger is largely a catalog-based operation — selling primarily to industrial and facilities maintenance operations.
Grainger’s big product categories include material handling equipment, security supplies, electrical products, power tools, plumbing supplies, cleaning supplies, building inspection supplies, vehicle components, and servic! es for i nventory management and energy efficiency. Grainger also distributes tools, fasteners, safety supplies, instruments, welding and shop equipment.
The company’s sales in November rose 15% compared to the same month a year ago. Grainger said that acquisitions accounted for 5% of this sales growth, so its organic growth actually was 10%. However, it hit a speed bump in its most recent earnings, with net income of $2.04 per share coming in less than the $2.10 analysts expected, though it was more than 12% higher than the year-ago period. Revenue of $2.08 million was up almost 14% and was on par with estimates.
Still, it was Grainger’s fifth consecutive quarter of double-digit earnings growth. Snap up shares of this Conservative company below $215.
For more stocks to buy, click here for the top blue-chip stocks for February.
Cost-conscious customers are watching their wallets closely, and their dollars go further at Dollar General. The company’s stores offer a big variety of products — from paper towels, trash bags, cleaning supplies, packaged foods, salty snacks, over-the-counter medications, pet supplies, seasonal products, kitchen supplies, small appliances as well as apparel for every member of the family. And the best part is that all of these products are mostly priced at $10 or less.
The company currently operates about 9,800 stores in 38 states and has big expansion plans this year that will serve as a near-term catalyst. Dollar General expects to open 625 new stores in 2012 and create 6,000 new jobs. Plus, the company has done a lot of work redesigning its current stores to make sure customers are able to get in and get out quickly with what they need.
In DG’s latest earnings call in early December, the company reported its third quarter of accelerated growth. And as a result of its strong November sales, the company raised its full-year earnings guidance to a range of $2.29 to $2.32 — up from the previously expected range of $2.22 to $2.30. Dollar General also announced a $500 million stock buyback program that bodes well for shares going forward in 2012.
The analyst community is expecting that Dollar General’s latest quarterly sales will rise 17.8% and that its earnings will rise 26.2% to 82 cents per share.
Fastenal (NASDAQ:FAST) is a “nuts and bolts” store. Essentially, what Amazon (NASDAQ:AMZN) is to retail shoppers, Fastenal is to businesses that need all kinds of specialty equipment and parts.
In fact, the company’s 2,500 stores offer 395,054 items for sale! — from nuts, bolts, rivets, screws, anchors, plumbing, hydraulic items and gobs of other equipment and accessories. The company has a reputation of a “can-do” supplier for contractors, engineers, repair shops, plumbers, welders and any number of other specialized industrial workers. Plus, Fastenal operates testing labs, custom manufacturing and inventory services to help customers’ operations run more smoothly and reduce related waste.
Earlier this month, the company announced its Q4 sales rose 22% to $697.8 million — compared with $573.8 million in the same quarter a year ago. During the same period, Fastenal’s earnings rose 34% to $87.5 million, or 30 cents per share — compared with $65.2 million or 22 cents per share. The analyst community was expecting $695.6 million in sales and earnings of 30 cents per share, so the company largely matched the consensus estimate. Looking ahead, Fastenal expects to increase its new store openings by 4% to 6% in 2012.
Right now, Fastenal is benefiting from increasing business spending.
W.W. Grainger (NYSE:GWW) is our third new buy recommendation this month. Like Fastenal, Grainger’s industrial supply stores are strongly benefiting from increased business spending, and the company also is seeing a solid boost in overall sales due to its presence in China, India and Latin America.
And although Grainger operates in the same industry as Fastenal, they often aren’t quite head-to-head competitors as you might expect. In fact, both companies are growing market share — at the expense of smaller players in the market. In addition, Grainger is largely a catalog-based operation — selling primarily to industrial and facilities maintenance operations.
Grainger’s big product categories include material handling equipment, security supplies, electrical products, power tools, plumbing supplies, cleaning supplies, building inspection supplies, vehicle components, and servic! es for i nventory management and energy efficiency. Grainger also distributes tools, fasteners, safety supplies, instruments, welding and shop equipment.
The company’s sales in November rose 15% compared to the same month a year ago. Grainger said that acquisitions accounted for 5% of this sales growth, so its organic growth actually was 10%. However, it hit a speed bump in its most recent earnings, with net income of $2.04 per share coming in less than the $2.10 analysts expected, though it was more than 12% higher than the year-ago period. Revenue of $2.08 million was up almost 14% and was on par with estimates.
Still, it was Grainger’s fifth consecutive quarter of double-digit earnings growth. Snap up shares of this Conservative company below $215.
For more stocks to buy, click here for the top blue-chip stocks for February.
