12 Undervalued Defensive Stocks for 2025

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5. Dollar Tree (NASDAQ:DLTR)

Forward P/E: 13.3

Number of Hedge Fund Holders: 40

Dollar Tree, Inc. (NASDAQ:DLTR) operates discount department stores and offers a wide range of merchandise under the brand names Dollar Tree and Dollar Tree Canada. Family Dollar stores offer home products, consumable merchandise, accessories and apparel, electronics, and seasonal merchandise.

The company saw positive results and sales in fiscal Q3 2024 due to its merchandising efforts for Dollar Tree and Family Dollar. Revenue for fiscal Q3 2024 was $7.56 billion, exceeding the forecast of $7.446 billion. Its net sales also grew significantly, primarily due to its non-comparable stores. The positive results for fiscal Q3 2024 reflect the company’s strong management of its strategic shifts. Despite macroeconomic challenges, Dollar Tree, Inc. (NASDAQ:DLTR)  is maintaining strong operational results.

The company is focusing on boosting the growth of its Dollar Tree brand and is converting stores to its in-line multi-price 3.0 format. It is opening new stores and improving the in-store experience for its customers through customer service enhancements and renovations. Dollar Tree’s non-comparable sales contributed over three times more revenue in 2024, reflecting the increased rate of Dollar Tree openings.

In fiscal Q3 2024, the company converted another 720 stores to the 3.0 format, bringing the total number of converted Dollar Tree stores to around 2,300. These stores produced around 30% of the company’s total net sales in fiscal Q3 2024. Dollar Tree, Inc. (NASDAQ:DLTR) plans to convert an additional 300 to 400 stores to the 3.0 format by the end of 2024, further boosting profitability.

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