Dollar General Stock: Is DG Underperforming the Consumer Defensive Sector?
With a market cap of $18.1 billion, Dollar General Corporation (DG) is a leading discount retailer in the United States, offering a wide range of low-priced merchandise across the southern, southwestern, midwestern, and eastern regions. It provides products in four main categories - consumables, seasonal items, home products, and apparel—featuring both national brands and private labels.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Dollar General fits this criterion perfectly. Headquartered in Goodlettsville, Tennessee, Dollar General continues to serve customers with everyday essentials at affordable prices.
However, the discount retailer pulled back 49.6% from its 52-week high of $164.12. Shares of Dollar General have gained 8.2% over the past three months, outperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) marginal decrease over the same time frame.
Longer term, DG stock is up 9% on a YTD basis, outperforming XLP’s 1.1% rise. Nevertheless, shares of Dollar General have dipped 47% over the past 52 weeks, lagging behind XLP’s 4.6% return over the same time frame.
DG stock has been trading below its 50-day and 200-day moving averages since last year.
Dollar General stock jumped 6.8% on March 13 after reporting better-than-expected Q4 results, with adjusted earnings of $1.68 per share beating estimates. Revenue reached $10.3 billion, surpassing expectations, driven by store remodeling and inventory trimming efforts. Full-year revenue rose nearly 5% to $40.6 billion, and the company projected 2025 comparable-store sales growth of 2.2%, topping the analyst consensus.
However, in comparison, rival Walmart Inc. (WMT) has outperformed DG, surging 40.7% over the past 52 weeks. But, Walmart saw a decline of 4.6% on a YTD basis, lagging behind Dollar General.
Despite DG’s underperformance over the past year, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 28 analysts covering the stock, and as of writing, it is trading below the mean price target of $86.15.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
