Dollar General Corporation (DG) Intrinsic Value & DCF Valuation
Discount Stores · NYSE
Current Price
$128.69
Intrinsic Value
$177.71
+27.6% margin of safety
What Is Dollar General Corporation's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Dollar General Corporation (DG) at $177.71 per share, compared with a market price of $128.69, a margin of safety of +27.6%. The base case assumes 7.4% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $132.14 to $230.77. 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 the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Dollar General Corporation (DG) Undervalued?
At $128.69, DG trades about 27.6% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Extensive Store Footprint
Dollar General's vast network of stores in rural and suburban areas provides unparalleled accessibility. This density creates a significant barrier to entry for competitors seeking similar reach.
↑Low-Cost Operating Model
The company's efficient supply chain and focus on private-label brands enable consistently low prices. This cost advantage is difficult for rivals to replicate, driving customer loyalty.
↑DG Media Network
The DG Media Network offers a unique advertising platform for suppliers. This creates a symbiotic relationship, enhancing supplier engagement and providing a revenue stream.
INVESTMENT RISKS
↓Economic Sensitivity
As a discount retailer, Dollar General's performance is tied to consumer spending. Economic downturns can reduce discretionary income, impacting sales volumes.
↓Supply Chain Disruptions
Global supply chain issues can affect product availability and increase costs. Reliance on efficient logistics makes the company vulnerable to external shocks.
↓Regulatory and Labor Costs
Changes in labor laws or minimum wage requirements can increase operating expenses. The company's large workforce makes it susceptible to these shifts.
Base case
DG base case valuation
Intrinsic Value
$177.71
Margin of safety
+27.6%
Expected annual return
+6.7%
Base case assumptions: 7.4% annual growth, 10.0% discount rate, 10x exit multiple, 5 year projection. Data as of 2026-07-29.
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
9.8x
EV/EBITDA
12.9x
FCF Yield
10.19%
Debt/Equity
1.79x
On a trailing twelve-month basis, DG generates free cash flow per share of $13.13 alongside a ROIC of 6.7%, both central inputs for a DCF valuation. Its P/FCF ratio of 9.8x and FCF yield of 10.19% then frame how DG is priced against peers on a cash flow basis.
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 $128.69, 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 9.8x with a free cash flow yield of 10.19%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. 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% means the company's return on invested capital sits below the level that typically clears 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 12.9x, 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 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.