Dollar General (DG) DIvidends Date & History

Key Takeaways

• Dollar General offers a current dividend yield of approximately 1.95%, providing reliable quarterly income for investors.
• Annual dividend stands at $2.36 per share, paid quarterly at $0.59 per share.
• Payout ratio of 34.45% indicates strong sustainability, well-covered by earnings and free cash flow.
• Dividend has grown at a 5-year CAGR of about 10.4%, reflecting a commitment to shareholder returns.
• Recent ex-dividend date was April 7, 2026, with payment on April 21, 2026.
• Free cash flow of $2.16 billion supports ongoing dividend payments amid moderate debt levels.

Dividend Overview

Dollar General Corporation (DG), a leading discount retailer serving rural and suburban communities, maintains a consistent quarterly dividend policy. The company currently pays $0.59 per share every three months, equating to an annualized dividend of $2.36 and a yield of around 1.95%. This positions DG as a modest dividend stock rather than a high-yield play, balancing payouts with reinvestment in store growth and operations. Initiated in 2015, the dividend reflects Dollar General's stable cash flows from its essential goods focus. While not a dividend aristocrat with a multi-decade streak, its policy emphasizes reliability, with payments well-supported by earnings. Investors value this profile for its defensive nature in consumer staples.

Dividend History and Growth

Dollar General began regular quarterly dividends in 2015 at $0.22 per share, steadily increasing over time. Key milestones include a jump from $0.42 to $0.55 in early 2022 and stabilization at $0.59 since late 2023. Annual totals rose from $1.13 in 2018 to $2.36 in 2024 and 2025, with no cuts recorded. The 5-year compound annual growth rate (CAGR) averages 10.4%, driven by earnings expansion and share repurchases. Recent history shows flat growth in 2024-2025 at $2.36 annually, prioritizing debt reduction amid higher leverage. This consistent upward trend underscores a long-term strategy of returning capital while funding over 800 new stores yearly.

Dividend Sustainability and Payout Ratio

Dollar General's dividend sustainability is robust, with a trailing payout ratio of 34.45%—well below 60%, leaving ample room for growth or downturns. Earnings per share (EPS) of $6.85 comfortably covers the $2.36 annual dividend, yielding over 2.9x coverage. Free cash flow (FCF) of $2.16 billion further bolsters this, with cash payout around 22%, and operating cash flow at $3.63 billion. Debt stands at $15.72 billion (debt-to-equity 184.66%), elevated post-expansion, but recent $1.7 billion note redemptions signal deleveraging. Targeting under 3x adjusted debt to EBITDAR, the company maintains investment-grade ratings. Profit margins (3.54%) and cash generation support ongoing payments.

Dividend Compared to Industry Peers

In the discount retail sector, Dollar General's 1.95% yield sits between low-yield peers like COST (0.51%, payout 27%) and WMT (0.78%, payout 34%)—both growth-focused giants prioritizing buybacks. Higher-yield TGT offers 3.8% (payout 55.6%), appealing to income seekers but with less coverage. Non-payer DLTR (0%) reinvests fully amid challenges. DG's yield exceeds peers' average (~1.3%), with a lower payout ratio signaling better sustainability versus TGT.

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Is This Stock Attractive for Dividend Investors?

Dollar General appeals to conservative income investors seeking steady, low-to-moderate yields backed by essential retail demand. Its 1.95% yield and 10.4% 5-year growth rate attract those prioritizing sustainability over high payouts, given the 34% ratio and strong FCF coverage. Long-term holders may appreciate the defensive moat in rural markets, consistent increases since 2015, and share buybacks boosting yield on cost. However, elevated debt (184% debt/equity) and flat recent growth could concern yield-chasers amid economic pressures on low-income consumers. Growth-oriented dividend investors might favor it for potential EPS expansion via store additions, while high-yield seekers may look elsewhere like TGT. Overall, it suits balanced portfolios valuing reliability over aggressive income.

Disclaimer

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