DOLLAR GENERAL CORP (DG) Stock Analysis
DOLLAR GENERAL CORP (DG) Stock Analysis
Analysis from 10-Q filed 2025-12-04. Data as of Q1 2026.
Overall Grade: F (Concerning)
DOLLAR GENERAL CORP faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 6.9% | Below expectations |
| FCF Margin | 5.6% | Healthy cash flow |
| Debt/Equity | 0.5x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
Explore DOLLAR GENERAL CORP: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: DOLLAR GENERAL CORP earns 6.9% ROIC, Bottom 50% in Consumer Discretionary
DOLLAR GENERAL CORP's trailing-twelve-month ROIC of 6.9% ranks Bottom 50% in Consumer Discretionary companies (sector median: 8.8%), driven by NOPAT margin of 4.0% combined with asset turnover of 1.4x. Source: 10-Q filed 2025-12-04. Gross margin of 30.7% with operating margin at 5.2% reflects a competitive pricing environment.
| Metric | DG | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.9% | Warning | Below sector median of 8.8% |
| Return on Equity (ROE) | 19.0% | Good | Efficient use of shareholder equity |
| Gross Margin | 30.7% | Good | Competitive pricing environment |
| Operating Margin | 5.2% | Adequate | Moderate operational efficiency |
Cash Flow: DOLLAR GENERAL CORP generates $2.4B FCF at 5.6% margin, positive NaN/8 quarters
DOLLAR GENERAL CORP generated $2.4B in free cash flow (TTM), a 5.6% FCF margin, a margin that ranks Top 50% in Consumer Discretionary. Operating cash flow exceeds net income by 2.4x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-12-04.
| Metric | DG | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 5.6% | Adequate | Healthy cash generation |
| Free Cash Flow (TTM) | $2.4B | Good | Positive cash generation |
| OCF/Net Income | 2.4x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: DOLLAR GENERAL CORP at 0.5x leverage
DOLLAR GENERAL CORP's debt-to-equity ratio of 0.5x reflects moderate leverage. Total debt of $4.6B offset by $1.1B in cash. Source: 10-Q filed 2025-12-04.
| Metric | DG | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.5x | Good | Moderate leverage |
| Net Cash Position | $-3.4B | Warning | Net debt position |
Valuation: DOLLAR GENERAL CORP trades at 20.9x earnings
DOLLAR GENERAL CORP trades at a P/E of 20.9x. Free cash flow yield of 7.6% offers attractive cash returns relative to price.
| Metric | DG | Rating | Context |
|---|---|---|---|
| P/E Ratio | 20.9x | Adequate | Premium valuation |
| EV/Sales | 0.8x | Excellent | Attractive revenue multiple |
| FCF Yield | 7.6% | Good | Attractive cash return |
| Dividend Yield | 1.6% | Adequate | Growth focus over income |
Capital Allocation: DOLLAR GENERAL CORP returns 1.6% shareholder yield
DOLLAR GENERAL CORP's total shareholder yield is 1.6% (dividends 1.6% + buybacks). Source: 10-Q filed 2025-12-04.
| Metric | DG | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.6% | Adequate | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $519.5M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.9% | Bottom 50% | 0.8x below |
| Free Cash Flow Margin | 5.6% | Top 50% | 2.1x above |
| Gross Margin | 30.7% | Bottom 50% | 0.8x below |
| Operating Margin | 5.2% | Top 50% | 1.1x above |
| Return on Equity (ROE) | 19.0% | Top 50% | 1.9x above |
| P/E Ratio | 20.9x | N/A | - |
Financial Scorecard
| Metric | DG | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 6.9% | Warning | Bottom 50% of sector (median: 8.8%) |
| Free Cash Flow Margin | 5.6% | Adequate | Top 50% of sector (median: 2.7%) |
| Gross Margin | 30.7% | Good | Bottom 50% of sector (median: 39.5%) |
| Debt to Equity Ratio | 53.6% | Good | Moderate leverage |
| P/E Ratio (Price-to-Earnings) | 20.9x | Adequate | Fair value |
| Free Cash Flow Yield | 7.6% | Good | Solid cash yield |
Frequently Asked Questions
Q: What is DOLLAR GENERAL CORP's Return on Invested Capital (ROIC)?
DOLLAR GENERAL CORP (DG) has a trailing twelve-month Return on Invested Capital (ROIC) of 6.9%. This compares below the sector median of 8.8%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is DOLLAR GENERAL CORP's Free Cash Flow Margin?
DOLLAR GENERAL CORP (DG) has a free cash flow margin of 5.6%, generating $2.4 billion in free cash flow over the trailing twelve months. A FCF margin between 5-10% is typical for capital-intensive businesses.
Q: Is DOLLAR GENERAL CORP stock overvalued or undervalued?
DOLLAR GENERAL CORP (DG) trades at a P/E ratio of 20.9x, which is above the sector median of N/A. The EV/Sales multiple is 0.8x. Free cash flow yield is 7.6%, which represents an attractive cash return to investors.
Q: Does DOLLAR GENERAL CORP pay a dividend?
DOLLAR GENERAL CORP (DG) currently pays a dividend yield of 1.6%. Including share buybacks, the total shareholder yield is 1.6%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does DOLLAR GENERAL CORP have?
DOLLAR GENERAL CORP (DG) has a debt-to-equity ratio of 0.5x with total debt of $4.6 billion. Net debt position is $3.4 billion.
Q: What is DOLLAR GENERAL CORP's revenue and earnings growth?
DOLLAR GENERAL CORP (DG) grew revenue by 5.2% year-over-year. Earnings per share increased by 34.1% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: How does DOLLAR GENERAL CORP compare to competitors in Consumer Discretionary?
Compared to other companies in Consumer Discretionary, DOLLAR GENERAL CORP (DG) shows: ROIC of 6.9% is below the sector median of 8.8% (Bottom 44%). FCF margin of 5.6% exceeds the sector median of 2.7% (Top 33% of sector). Gross margin at 30.7% is 8.9 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Discretionary companies with available SEC filings.
Q: What warning signs should I watch for with DOLLAR GENERAL CORP?
DOLLAR GENERAL CORP (DG) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-12-04. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.