Dollar General Corporation (DG) Intrinsic Value & DCF Valuation
Discount Stores · NYSE
Current Price
$114.80
Intrinsic Value
$176.11
+34.8% margin of safety
What Is Dollar General Corporation's Intrinsic Value?
As of 2026-06-12, our base-case DCF model estimates the intrinsic value of Dollar General Corporation (DG) at $176.11 per share, compared with a market price of $114.8, a margin of safety of +34.8%. The base case assumes 8.9% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $128.6 to $231.43. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How our DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Dollar General Corporation (DG) Undervalued?
At the current price of $114.8, DG trades well below our base-case intrinsic value estimate, a margin of safety above 30%. By this model the stock looks undervalued, but verify the growth assumptions match your own view before acting.
COMPETITIVE MOAT
↑Rural Market Dominance
Dollar General's extensive store network in rural and underserved areas creates a significant barrier to entry. This geographic concentration makes it difficult for competitors to replicate their reach and convenience for these specific customer segments.
↑Value Proposition Resilience
The company's consistent focus on low prices appeals to a broad customer base, especially during economic downturns. This value-driven model fosters customer loyalty even as consumers face rising costs for essentials like food and fuel.
↑Operational Efficiency
Dollar General's lean operating model and supply chain efficiencies allow them to maintain low price points. This disciplined approach to cost management is crucial for profitability in the discount retail sector.
INVESTMENT RISKS
↓Customer Spending Cutbacks
Rising fuel costs and reduced SNAP benefits are forcing core customers to cut back on essential purchases, particularly food. This directly impacts sales volume and revenue for Dollar General.
↓Increased Competition
While dominant in rural areas, Dollar General faces intensifying competition from other discount retailers and online platforms. This can pressure margins and market share.
↓Inventory Management Challenges
Balancing inventory to meet demand while managing costs is a constant challenge. Unexpected shifts in consumer purchasing habits or supply chain disruptions can lead to inefficiencies.
Base case
DG base case valuation
Intrinsic Value
$176.11
Margin of safety
+34.8%
Expected annual return
+8.9%
Base case assumptions: 8.9% annual growth, 10.0% discount rate, 9x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Dollar General Corporation respond.
Open DCF Calculator for DGCompany Overview
Dollar General Corporation is a prominent discount retail chain that offers a wide array of merchandise across the southern, southwestern, Midwestern, and eastern regions of the United States. Its extensive product assortment primarily features consumable items. This includes household essentials such as paper products, cleaning supplies, and laundry detergents; a wide array of food options, ranging from shelf-stable groceries like cereals, pasta, canned goods, condiments, and baking ingredients, to fresh and refrigerated perishables such as milk, eggs, bread, and frozen foods, as well as alcoholic beverages like beer and wine. The selection further encompasses popular snacks (candies, cookies, crackers, and carbonated drinks), health and beauty aids (over-the-counter medications, personal care items, cosmetics, dental, and foot care products), pet food and supplies, and tobacco products. Beyond consumables, Dollar General offers seasonal merchandise, which includes holiday decorations, toys, electronics, greeting cards, stationery, prepaid phone services and accessories, gardening tools, hardware, automotive items, and home office supplies. Customers can also find various home goods, from kitchenware and small appliances to lighting, storage solutions, frames, candles, craft materials, and soft furnishings for the kitchen, bed, and bath. Lastly, the company stocks a selection of apparel, featuring everyday clothing for infants, children, women, and men, along with socks, underwear, disposable diapers, shoes, and accessories. As of February 25, 2022, Dollar General operated an impressive 18,190 stores spread across 47 U.S. states. Originally established in 1939 as J.L. Turner & Son, Inc., the company adopted its current name, Dollar General Corporation, in 1968. Its corporate headquarters are situated in Goodlettsville, Tennessee.
Financial Metrics — DG Stock Valuation Data
Revenue/Share (TTM)
$195.49
FCF/Share (TTM)
$13.13
ROIC (TTM)
6.7%
ROE (TTM)
18.7%
P/FCF
8.8x
EV/EBITDA
13.0x
FCF Yield
11.42%
Debt/Equity
1.79x
Based on trailing twelve-month data, DG shows a free cash flow per share of $13.13 and a ROIC of 6.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 8.8x and FCF yield of 11.42% are important context metrics when evaluating DG's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DG?
Dollar General Corporation currently generates $13.13 in free cash flow per share. At the current price of $114.80, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DG undervalued?
DG trades at a P/FCF ratio of 8.8x with a free cash flow yield of 11.42%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether DG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DG stock using DCF?
To perform a DCF valuation on Dollar General Corporation: (1) Start with the trailing free cash flow per share ($13.13) 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 — with a debt-to-equity of 1.79x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DG?
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 company will produce over the next 5-10 years, shaped by Discount Stores trends, then discounting those amounts to today's dollars. DG's ROIC of 6.7% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect DG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DG, with a debt-to-equity ratio of 1.79x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value DG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.