A Comprehensive Analysis of Dollar General Corp's Dividend History, Yield, Growth, and Sustainability
Dollar General Corp(DG, Financial) recently announced a dividend of $0.59 per share, payable on 2023-10-24, with the ex-dividend date set for 2023-10-06. As investors anticipate this forthcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into Dollar General Corp's dividend performance and assess its sustainability.
Understanding Dollar General Corp's Business
Dollar General Corp, a premier American discount retailer, operates over 19,000 stores across 47 states. It offers a diverse range of branded and private-label products across multiple categories. In fiscal 2022, consumables accounted for 80% of net sales, seasonal merchandise 11%, home products 6%, and apparel 3%. The company's stores average about 7,500 square feet, with approximately 75% located in towns with populations of 20,000 or fewer. Dollar General Corp emphasizes value, with most items sold at everyday low prices of $5 or less.
Exploring Dollar General Corp's Dividend History
Dollar General Corp has demonstrated a consistent dividend payment record since 2015, with dividends currently distributed on a quarterly basis. The chart below shows the annual Dividends Per Share for tracking historical trends.
Analyzing Dollar General Corp's Dividend Yield and Growth
As of today, Dollar General Corp boasts a 12-month trailing dividend yield of 2.11% and a 12-month forward dividend yield of 2.17%. This suggests an expectation of increased dividend payments over the next 12 months.
Dollar General Corp's dividend yield of 2.11% is near a 10-year high and outperforms 38.42% of global competitors in the Retail - Defensive industry. This implies that the company's dividend yield is an attractive proposition for income investors.
Over the past three years, Dollar General Corp's annual dividend growth rate was 19.80%. Extended to a five-year horizon, this rate decreased to 15.30% per year. Based on Dollar General Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Dollar General Corp stock as of today is approximately 4.30%.
Examining Dividend Sustainability: Payout Ratio and Profitability
To gauge the sustainability of the dividend, it's imperative to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-07-31, Dollar General Corp's dividend payout ratio is 0.23.
Dollar General Corp's profitability rank is 9 out of 10 as of 2023-07-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Assessing Growth Metrics: The Future Outlook
Dollar General Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Dollar General Corp's revenue has increased by approximately 15.90% per year on average, a rate that outperforms approximately 83.33% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Dollar General Corp's earnings increased by approximately 17.20% per year on average, a rate that outperforms approximately 54.43% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 16.30% outperforms approximately 64.46% of global competitors.
Concluding Thoughts
In conclusion, Dollar General Corp's consistent dividend payments, high dividend growth rate, low payout ratio, high profitability, and robust growth metrics make it an attractive investment for dividend-focused investors. As the company continues to grow and maintain its profitability, investors can look forward to sustainable and potentially increasing dividends in the future. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
