Discount Stores · NYSE
Current Price
$114.17
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Dollar General Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
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.
ROIC (TTM)
6.6%
ROE (TTM)
18.7%
FCF Yield
12.26%
Based on trailing twelve-month data, DG shows a free cash flow per share of N/A and a ROIC of 6.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 12.26% are important context metrics when evaluating DG's stock valuation relative to peers.
The intrinsic value of DG depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether DG is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $114.17. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Dollar General Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Discount Stores industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DG's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Dollar General Corporation, this means projecting how much free cash flow the Discount Stores will produce over the next 5-10 years, then discounting those amounts to today's dollars. DG's ROIC of 6.6% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DG, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
