One-glance verdict
Undervalued
$228.20 our estimate vs market $124.31
Wall Street consensus: $138.93 (-39.1% lower than our fair-value estimate)
46% below our estimate, below the bear case
Fundamentals snapshot
Dollar General Corporation
DG · NYQ · Consumer Defensive · Discount Stores
Current price
$124.31
52-week range
$95.11 - $158.23
Market cap
$27.42B
Balance sheet
Stretched
9.56x Adequate
Net debt $14.18B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 2.1% last year.
- Reward Returns 19.7% on equity, ahead of 25% of its peers.
- Risk Operating margin compressed from 8.8% to 6.8% over 3 years.
- Risk Insider ownership is only 0.3% (peer median: 0.6%).
What this company does
Dollar General Corporation
Dollar General is a discount store that sells everyday necessities like groceries, cleaning supplies, and basic clothing at low prices across the United States. The company makes most of its money from these consumable products (things people use up and have to buy again), which creates a steady stream of sales because customers keep coming back, especially when they're trying to save money.
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. They opened the first Dollar General store in 1955 with a simple concept: no item would cost more than one dollar. This idea was a huge success, and the company grew rapidly, eventually becoming a publicly traded company (a company that sells shares of ownership to the public) in 1968. Over the decades, it has grown into one of the largest discount retailers in the U.S., with a particular focus on serving small towns and rural communities.
What it actually does
Dollar General is a neighborhood convenience store that sells a wide variety of everyday items at low prices. You can find everything from paper towels, cleaning supplies, and packaged foods to health and beauty products, pet supplies, and seasonal decorations. The stores are designed to be small and easy to shop in, offering a mix of well-known national brands and their own private-label products, which are often cheaper alternatives. The main goal is to provide a quick and affordable shopping trip for customers who need to pick up essential household goods without going to a large supermarket.
Consumables
This is by far the largest part of Dollar General's business, making up about 80% of its sales. This segment includes all the essential items that people use up and buy regularly, like paper towels, laundry detergent, and trash bags. It also covers packaged foods like cereal and canned soup, perishable items like milk and eggs, snacks, drinks, and personal care products like shampoo and soap. Because these are necessities, this part of the business provides a steady and reliable stream of revenue (money the company earns from sales).
Seasonal
This segment includes items that are popular during specific times of the year, and it accounts for about 10% of the company's sales. Think of things like holiday decorations, toys for Christmas, gardening supplies in the spring, and back-to-school items in the late summer. This category helps attract shoppers who are looking for festive or timely items at a discount. While smaller than the consumables business, these products often have higher profit margins (the amount of profit made on each sale).
Home Products
Making up a smaller slice of the business, this category includes items for around the house. This includes kitchen supplies like pots and pans, small appliances, light bulbs, and storage containers. You can also find home decor items like picture frames and candles, as well as bedding and bath towels. These products help customers furnish and maintain their homes without spending a lot of money.
Apparel
This is the smallest of Dollar General's business segments. It includes basic clothing for the whole family, such as socks, underwear, t-shirts, and casual wear for adults and children. The focus is on providing affordable everyday essentials rather than high-fashion items. While it's not a major driver of sales, it adds to the store's convenience by allowing customers to pick up basic clothing items along with their other household needs.
What management is betting on now
The company is focused on making its stores even more essential to its customers, especially in rural areas. A major priority is expanding its selection of fresh and frozen foods through an initiative called DG Fresh, which helps the company offer more grocery options like milk, eggs, and produce. They are also remodeling many stores to make them easier to shop and are expanding their health and wellness offerings. Additionally, Dollar General is investing in digital tools, like its mobile app and delivery services, to provide customers with more ways to shop conveniently.
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 $228.20 vs current price $124.31
Wall Street consensus is the average analyst price target: $138.93 (-39.1% lower than our fair-value estimate).
Our most-likely fair value is $228.20 a share — about 83.6% above today's price of $124.31, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $14.2B. Interest coverage 9.6x.
Net debt
$14.18B
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 $15.77B Interest coverage 9.56x This is the baseline the peer rows are being compared against.
Total debt $5.91B Interest coverage 11.89x +24% vs DG Carries about 1.2x more debt cushion than DG.
Total debt $2.04B Interest coverage 34.71x +263% vs DG Carries about 3.6x more debt cushion than DG.
Total debt $725.65M Interest coverage 17.25x +81% vs DG Carries about 1.8x more debt cushion than DG.
What you should know
The case for and against DG
3 Rewards
2 Risks
Rewards
-
Revenue grew 2.1% last year.
-
Returns 19.7% on equity, ahead of 25% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 8.8% to 6.8% over 3 years.
-
Insider ownership is only 0.3% (peer median: 0.6%).
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)
16.14x
Forward P/E
15.07x
P/B
2.95x
P/S
0.63x
EV/EBITDA
11.63x
PEG ratio
1.83x
Profitability
How much profit each dollar creates
Gross margin
31.2%
Operating margin
6.8%
Net margin
3.9%
ROE
19.7%
ROA
4.9%
Health
Liquidity and balance-sheet strength
Debt / equity
1.70x
Current ratio
1.21x
Quick ratio
0.23x
Total debt
$15.77B
Total cash
$1.59B
Growth
How the business has been compounding
Revenue TTM
$43.64B
Revenue 5Y CAGR
5.7%
EPS TTM
7.70
EPS 5Y CAGR
-13.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$3.32B
Free CF TTM
$2.39B
FCF margin
5.5%
Dividend
Shareholder payout
Yield
1.9%
Payout ratio
30.6%
Last ex-div date
2026-10-06