One-glance verdict
Undervalued
$218.42 our estimate vs market $127.72
Wall Street consensus: $131.41 (-39.8% lower than our fair-value estimate)
42% below our estimate, below the bear case
Fundamentals snapshot
Dollar General Corporation
DG · NYQ · Consumer Defensive · Discount Stores
Current price
$127.72
52-week range
$95.11 - $158.23
Market cap
$28.17B
Balance sheet
Stretched
9.56x Adequate
Net debt $14.45B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 0.8% last year.
- Reward Returns 18.9% on equity, ahead of 20% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Operating margin compressed from 8.8% to 5.9% over 3 years.
What this company does
Dollar General Corporation
Dollar General is a discount store that sells a wide range of low-priced household goods, groceries, and clothing across the United States. The company makes most of its money from "consumables" like food and cleaning supplies, which matters because shoppers need to buy these basic items consistently, making sales potentially more stable even during tough economic times.
How the company got here
Dollar General began in 1939 as a family-owned wholesale business in Kentucky started by J.L. Turner and his son, Cal. [9, 10] After successfully liquidating bankrupt general stores during the Great Depression, they opened the first Dollar General store in 1955 with a simple idea: no item would cost more than one dollar. [10, 14] This model of offering value and convenience proved incredibly popular, and the company expanded rapidly, especially in small, rural towns often overlooked by larger retailers. [14] Over the decades, it grew from a single store into one of the largest discount retailers in the United States, with thousands of locations. [2]
What it actually does
Dollar General operates as a neighborhood general store, selling a wide range of everyday items in small, conveniently located shops. [7] Unlike big supermarkets, its stores have a focused selection of products, which allows for a quick in-and-out shopping experience for customers who need to pick up a few essential items. [1, 3] The company's main focus is on serving budget-conscious shoppers, many of whom live in small towns and rural areas where other stores might be miles away. [6, 14] They sell well-known national brands alongside their own private-label products at competitive prices. [2]
Consumables
This is Dollar General's largest and most important business segment, making up the vast majority of its sales, at over 80%. [4] It includes all the everyday necessities that people use up and need to buy frequently. [3] This covers everything from packaged foods like cereal and snacks, to cleaning supplies, paper towels, trash bags, over-the-counter medicines, and personal care items like soap and shampoo. [13] Because these are essential items, this segment consistently brings customers back into the stores on a regular basis. [3]
Seasonal
This segment includes products that are popular during specific times of the year and represents about 10% of the company's business. [4] Think of items for major holidays like decorations for Christmas or Halloween, back-to-school supplies in the late summer, or gardening tools and outdoor supplies in the spring. [2, 13] This part of the store changes throughout the year to match current holidays and seasons, encouraging shoppers to stop in to see what's new. [13]
Home Products
Making up a smaller slice of the business, this category includes items for around the house. [4] This part of the store sells things like kitchen supplies, cookware, small appliances, light bulbs, and home decor items like picture frames and candles. [2] It provides customers with affordable options for household goods they might need without having to make a special trip to a larger department store. [3]
Apparel
This is the smallest of Dollar General's product categories. [4] It consists of basic clothing for the whole family, such as socks, underwear, t-shirts, and other casual wear. [2, 13] While not a fashion destination, this segment provides essential and affordable clothing options for customers who are already in the store for their everyday needs. [2]
What management is betting on now
Management is focused on making stores better and reaching more customers. A key strategy involves remodeling thousands of existing stores to make them easier to shop in and expanding their offerings, including adding more fresh produce and refrigerated foods. [7, 16] They are also continuing to open new, slightly larger stores, primarily in their core market of rural America. [12] The company is investing heavily in its supply chain (the network of warehouses and trucks that gets products to stores) to improve efficiency and keep shelves stocked, a project they call DG Fresh. [2] Finally, they are expanding digital options, like delivery services, to give customers more ways to shop. [17]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$635.22M
FY2025 Q4
$201.02M
FY2026 Q2
$556.23M
FY2026 Q3
$564.71M
FY2026 Q4
$581.97M
FY2027 Q2
$364.58M
Revenue
$10.79B
Net income
$444.13M
Diluted EPS
2.00
Operating cash flow
$716.19M
Free cash flow
$364.58M
Fetching…
Sources
Revenue
$10.91B
Net income
$426.30M
Diluted EPS
1.93
Operating cash flow
$815.67M
Free cash flow
$581.97M
Fetching…
Sources
Revenue
$10.73B
Net income
$411.43M
Diluted EPS
1.86
Operating cash flow
$967.70M
Free cash flow
$564.71M
Fetching…
Sources
Revenue
$10.44B
Net income
$391.93M
Diluted EPS
1.78
Operating cash flow
$847.15M
Free cash flow
$556.23M
Fetching…
Sources
Revenue
$10.18B
Net income
$196.53M
Diluted EPS
0.89
Operating cash flow
$542.43M
Free cash flow
$201.02M
Fetching…
Sources
Revenue
$10.21B
Net income
$374.19M
Diluted EPS
1.70
Operating cash flow
$988.92M
Free cash flow
$635.22M
Fetching…
Sources
Is it cheap or expensive?
Fair value $218.42 vs current price $127.72
Wall Street consensus is the average analyst price target: $131.41 (-39.8% lower than our fair-value estimate).
Our most-likely fair value is $218.42 a share — about 71.0% above today's price of $127.72, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $14.4B. Interest coverage 9.6x.
Net debt
$14.45B
Interest coverage
9.56x
Dollar General Corporation's profit covers its interest bill about 9.6 times over. which is weaker than most peers shown here.
Stretched
Worse cushion
Baseline
Better cushion
DG
BASELINE
Dollar General Corporation
Total debt $15.80B Interest coverage 9.56x This is the baseline the peer rows are being compared against.
Total debt $7.59B Interest coverage 19.33x +102% vs DG Carries about 2.0x more debt cushion than DG.
Total debt $2.00B Interest coverage 34.71x +263% vs DG Carries about 3.6x more debt cushion than DG.
Total debt $710.30M Interest coverage 17.25x +81% vs DG Carries about 1.8x more debt cushion than DG.
Total debt $14.18B Interest coverage 97.00x +915% vs DG Carries about 10.1x more debt cushion than DG.
What you should know
The case for and against DG
3 Rewards
1 Risk
Rewards
-
Revenue grew 0.8% last year.
-
Returns 18.9% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 8.8% to 5.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
18.09x
Forward P/E
15.92x
P/B
3.19x
P/S
0.65x
EV/EBITDA
12.54x
PEG ratio
1.82x
Profitability
How much profit each dollar creates
Gross margin
30.8%
Operating margin
5.9%
Net margin
3.6%
ROE
18.9%
ROA
4.6%
Health
Liquidity and balance-sheet strength
Debt / equity
1.79x
Current ratio
1.17x
Quick ratio
0.19x
Total debt
$15.80B
Total cash
$1.35B
Growth
How the business has been compounding
Revenue TTM
$43.08B
Revenue 5Y CAGR
5.7%
EPS TTM
7.06
EPS 5Y CAGR
-13.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$3.50B
Free CF TTM
$2.39B
FCF margin
5.6%
Dividend
Shareholder payout
Yield
1.9%
Payout ratio
33.4%
Last ex-div date
2026-07-07