As someone else mentioned, Dollar Tree is different. There is a Dollar Tree that is always packed next to an empty Dollar General in my hometown. Dollar Tree is a deep discount store. Dollar General is a convenience store without gas.
As someone else mentioned, Dollar Tree is different. There is a Dollar Tree that is always packed next to an empty Dollar General in my hometown. Dollar Tree is a deep discount store. Dollar General is a convenience store without gas.
If the company is successful, it will know that and it will purge the lousy stores. Otherwise, they’ll implode when the interest rates go up and they can’t borrow money anymore.
$1.2 billion in profit on $22 billion in sales. They have $2.6 billion in long-term debt, paying ~$100m in annual interest on their total debt.
They could afford a 15% interest rate on their debt.
With their income, they have no need to borrow to build out stores. Their dividend is modest, so that's also no concern vs their need to spend to build.
That works because it’s an investment that lets passive investors yield 5-7%, which is a good yield from a company with a good credit rating.
As rates rise, it gets less and less attractive, especially as leases start maturing, growth slows, and you need to put capital dollars into cheap buildings that you don’t own. It’s not a bad company, but it’s no Walmart.
https://www.google.com/maps/@28.1248173,-81.6377691,3a,87.1y...
To see Walmart turn 180 degrees.