Dividend Aristocrats In Focus Part 51: Family Dollar

Family Dollar (NYSE: FDO) is the smallest Dividend Aristocrat discount retailer, behind giants Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Family Dollar has a market cap of "just" $9 billion and operates relatively small (compared to supercenters) discount retail stores in the US. When I last wrote about Family Dollar, I analyzed the company's pending acquisition by Dollar Tree (Nasdaq: DLTR).The Dollar Tree acquisition of Family Dollar is expected to occur in the first quarter of 2015. This article will be slightly different than previous Dividend Aristocrats In Focus articles due to the pending acquisition. I will still look into Family Dollar's operations and competitive advantage. Instead of analyzing the company's future growth prospects, I will analyze its fit with Dollar Tree.Business OverviewUnlike most Dividend Aristocrats, Family Dollar operates in only one main segment, but the company does divide its operations into 4 sales categories. The percent of revenue each category generated for the company in its full fiscal 2014 is shown below:Consumables: 73% of total revenueHome Products: 10% of total revenueApparel & Accessories: 7% of total revenueSeasonal & Electronics: 10% of total revenueThe Consumables category makes up the majority of Family Dollar's sales. This is intuitive as shoppers tend to go to Family Dollar looking for low prices on every day goods.Family Dollar operates 8,042 stores across the United States. The company has 58.11... Read more