Dollar General Corporation (DG) Stock Valuation — PE Analysis
Discount Stores · NYSE
Current Price
$114.80
PE Ratio (TTM)
16.2x
Intrinsic Value
$143.52
+20.0% margin of safety
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 PE valuation
A base case PE valuation for DG estimates a fair value of about $143.52 per share, against a current price of $114.8. The model assumes 9.1% annual earnings growth, a 16x target PE multiple, and a 10% discount rate.
Intrinsic Value
$143.52
Margin of safety
+20.0%
Expected annual return
+4.6%
Base case assumptions: 9.1% annual earnings growth, 16x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DG PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Dollar General Corporation respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
16.2x
PEG Ratio
0.45
Earnings Yield
6.18%
ROE (TTM)
18.7%
Revenue/Share (TTM)
$195.49
Dividend Yield
2.06%
Debt/Equity
1.79x
Frequently Asked Questions
What is the PE ratio of DG?
The trailing twelve-month PE ratio of DG reflects how much investors pay per dollar of Dollar General Corporation's earnings. This metric is most useful when compared to Discount Stores peers and the company's own historical range.
Is DG overvalued based on PE ratio?
DG's PE of 16.2x combined with a PEG ratio of 0.45 provides a growth-adjusted perspective. A PEG below 1.0 suggests DG may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Discount Stores, a DCF analysis may be more appropriate.
How do I value DG stock using PE ratio?
To value Dollar General Corporation using PE: (1) Compare the current PE (16.2x) against the Discount Stores median to assess relative pricing, (2) check the PEG ratio (0.45) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of DG?
DG's PEG ratio is 0.45, calculated by dividing the PE ratio (16.2x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for DG stock valuation?
PE ratio gives a quick relative read — how DG is priced versus Discount Stores peers. DCF provides an absolute value based on projected free cash flows. For DG, with a strong ROE of 18.7%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See DG DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Defensive valuationsP/E and DCF value DG with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.