Dollar General (DG) AI Stock Analysis

• Market Cap: $19.68B
• Dividend Yield: 2.64%
• Average Volume (3M): 4.63M
• Price to Earnings (P/E): 17.5
• Beta (1Y): -0.28
• Revenue Growth: 4.96%
• EPS Growth: -32.41%
• Country: US
• Employees: 194,200
• Sector: Consumer Cyclical
• Sector Strength: 67
• Industry: Discount Stores
• EPS (TTM): 1.68
• Shares Outstanding: 219,947,080
• 10 Day Avg. Volume: 3,071,655
• 30 Day Avg. Volume: 4,630,229
• PEG Ratio: -1.13
• Price to Book (P/B): 2.72
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.96
• Enterprise Value/Market Cap: 1.86
• Enterprise Value/Revenue: 0.23
• Enterprise Value/Gross Profit: 3.11
• Enterprise Value/Ebitda: 3.25
• 1Y Price Target: $91.40
• Price Target Upside: 5.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 21

Dollar General's stock score reflects steady financial performance with strong cash flow and reasonable valuation. Despite positive technical indicators, the company faces challenges with declining profit margins and operational hurdles highlighted in the earnings call. The mixed sentiment from the earnings call tempers the outlook, but the stock's valuation and dividend yield provide some buffer.

Positive Factors

Macroeconomic Environment

DG will likely benefit from a deteriorating macroeconomic environment and lack of tariff exposure.

Market Share

DG is well positioned to gain market share in the current environment.

Operational Strategy

Improved inventory levels and reduced store manager turnover are anticipated to continue benefiting the company through 2025.

Negative Factors

Competitive Pricing

If Walmart indicates a plan to 'invest in price', it would be a negative for Dollar General.

Customer Base

DG's penetration of low-income households declined, which could be seen negatively as this is DG's core customer base.

Dollar General Business Overview & Revenue Model

Company Description

Dollar General Corporation, a discount retailer, provides various merchandise products in the southern, southwestern, Midwestern, and eastern United States. It offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, disinfectants, and laundry products; packaged food comprising cereals, pasta, canned soups, fruits and vegetables, condiments, spices, sugar, and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer, and wine. The company's consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks, and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics, and dental hygiene and foot care products; pet supplies and pet food; and tobacco products. In addition, it offers seasonal products comprising holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies; and home products that include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. Further, the company provides apparel, which comprise casual everyday apparel for infants, toddlers, girls, boys, women, and men, as well as socks, underwear, disposable diapers, shoes, and accessories. As of February 25, 2022, it operated 18,190 stores in 47 states in the United States. The company was formerly known as J.L. Turner & Son, Inc. and changed its name to Dollar General Corporation in 1968. Dollar General Corporation was founded in 1939 and is based in Goodlettsville, Tennessee.

How the Company Makes Money

Dollar General makes money primarily through the sale of a wide range of merchandise at its retail locations. Its revenue model is built on a high-volume, low-margin strategy, where the company leverages its expansive network of stores to sell goods at competitive prices. The company’s key revenue streams include consumables such as food and beverages, cleaning supplies, paper products, and personal care items, which account for the largest portion of its sales. Additionally, Dollar General generates earnings from the sale of seasonal products, home goods, and clothing. The company frequently benefits from strategic partnerships with suppliers and companies that provide branded products sold in its stores. Furthermore, Dollar General's private label brands contribute to its profitability by offering higher margins compared to national brands. The company's ability to maintain low operational costs, efficient supply chain management, and strategic store locations also significantly enhance its profitability.

Dollar General Financial Statement Overview

Summary

Dollar General shows steady revenue growth and strong cash flow, indicating sustainability. However, declining profit margins and high leverage present risks. Focus on cost management and debt reduction could enhance financial stability.

Income Statement

Dollar General's income statement shows moderate performance with a gross profit margin of approximately 29.6% and a net profit margin of 2.8% for the latest year. The revenue growth rate from 2024 to 2025 is about 5%, indicating steady growth, though margins have slightly decreased due to rising costs impacting profitability. The EBIT and EBITDA margins have also contracted, reflecting operational challenges.

Balance Sheet

The balance sheet indicates a relatively high debt-to-equity ratio of 2.36, suggesting significant leverage, which poses financial risk. However, the equity ratio is 23.8%, showing that a reasonable portion of assets is financed by equity. Return on equity has decreased over recent years to 15.2%, reflecting reduced profitability relative to equity.

Cash Flow

The cash flow statement reveals robust operating cash flow relative to net income, with an operating cash flow to net income ratio of 2.66. Free cash flow grew substantially by 143.9% from the previous year, indicating strong cash generation capability and efficient capital expenditure management.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
40.61B	38.69B	37.84B	34.22B	33.75B
	Gross Profit
12.02B	11.72B	11.82B	10.81B	10.72B
	EBIT
1.71B	2.45B	3.33B	3.22B	3.55B
	EBITDA
2.69B	3.30B	4.05B	3.86B	4.13B
	Net Income Common Stockholders
1.13B	1.66B	2.42B	2.40B	2.66B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
932.58M	537.28M	381.58M	344.83M	1.38B
	Total Assets
31.13B	30.80B	29.08B	26.33B	25.86B
	Total Debt
17.46B	18.09B	17.66B	14.25B	13.59B
	Net Debt
16.53B	17.55B	17.28B	13.90B	12.21B
	Total Liabilities
23.72B	24.05B	23.54B	20.07B	19.20B
	Stockholders Equity
7.41B	6.75B	5.54B	6.26B	6.66B
Cash Flow		Free Cash Flow
1.69B	691.58M	423.97M	1.80B	2.85B
	Operating Cash Flow
3.00B	2.39B	1.98B	2.87B	3.88B
	Investing Cash Flow
-1.31B	-1.69B	-1.56B	-1.07B	-1.02B
	Financing Cash Flow
-1.29B	-542.07M	-392.46M	-2.83B	-1.71B

Dollar General Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 86.85
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DG, the sentiment is Negative. The current price of 86.85 is below the 20-day moving average (MA) of 92.26, below the 50-day MA of 87.26, and above the 200-day MA of 84.82, indicating a neutral trend. The MACD of 0.61 indicates Positive momentum. The RSI at 41.21 is Neutral, neither overbought nor oversold. The STOCH value of 26.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DG.

Dollar General Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMT	79 Outperform	$774.09B	40.23	22.23%	0.89%	5.07%	25.86%
OLLI	79 Outperform	$6.99B	35.24	12.47%	―	8.04%	10.75%
BJ	75 Outperform	$14.71B	27.92	32.33%	―	2.67%	2.72%
DG	64 Neutral	$19.68B	17.50	15.89%	2.64%	4.96%	-32.41%
Sector *	61 Neutral	$6.93B	11.84	2.89%	3.91%	2.59%	-21.68%
DLTR	61 Neutral	$18.70B	―	18.88%	―	-9.88%	-205.57%
TGT	60 Neutral	$45.93B	11.41	29.12%	4.41%	-0.79%	-0.90%

Dollar General Corporate Events

Dollar General Amends Credit Agreement for Flexibility

On March 11, 2025, Dollar General Corporation amended its unsecured credit agreement, originally dated September 3, 2024, to adjust financial covenants and restrictions during a Covenant Relief Period lasting until January 30, 2026. The amendment impacts the company’s leverage and fixed charge coverage ratios, limits stock repurchases, and reduces the ability to incur additional debt, reflecting a strategic financial maneuver to maintain operational flexibility. Additionally, the company announced a quarterly cash dividend of $0.59 per share, payable on April 22, 2025, indicating a commitment to returning value to shareholders.