Sunday, February 3, 2013

Why Dollar Tree Is Poised to Grow

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 and see what CAPS investors are saying about the stock right now.

Dollar Tree facts

Headquarters (founded)

Chesapeake, Va. (1986)

Market Cap

$9.3 billion

Industry

General merchandise stores

Trailing-12-Month Revenue

$7.1 billion

Management

CEO Bob Sasser (since 2004)

CFO Kevin Wampler (since 2008)

Return on Equity (average, past 3 years)

32.7%

Cash/Debt

$222.4 million / $264.3 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 514 members who have rated Dollar Tree believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star joryko, succinctly summed up the Dollar Tree bull case for our community:

Best in class with a substantial growth runway still remaining. 5-10% yearly storefront expansion expected and a [PEG ratio] of 0.9. 32% reduction in shares over the last decade and the best cash to debt ratio in the dollar store industry.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Dollar Tree may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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