Dollar General (DG) DIvidends Date & History

Key Takeaways

• DG pays a quarterly dividend of $0.59 per share, or $2.36 annualized, for a modest yield of roughly 2%.
• Dollar General has raised its dividend for about a decade, with a five-year dividend growth rate of approximately 10% to 11%.
• The payout ratio of roughly one-third of earnings is conservative, leaving ample room to sustain and grow the dividend.
• Free cash flow coverage is strong, with a cash payout ratio near 24%, well below earnings coverage.
• The most recent increase, to $0.59 per share, came in 2023; payments have since been held steady amid earnings pressure.

Dividend Overview

Dollar General Corporation (DG), one of the largest discount retailers in the United States, maintains a steady quarterly dividend. The company currently pays $0.59 per share each quarter, or $2.36 per share on an annualized basis, translating to a dividend yield of roughly 2%. Dollar General is best described as a dividend growth stock with a modest yield rather than a high-yield income vehicle. It has prioritized consistent, above-average payout increases over maximizing current income, making it more attractive to long-term investors focused on compounding income than to those seeking immediate high yield. The dividend is paid quarterly, aligning with the company's stable, cash-generative retail operations, and the payout has historically been well-covered by both earnings and free cash flow.

Dividend History and Growth

Dollar General initiated its dividend in 2015 and has increased it consistently since then, building a growth streak of more than a decade. The quarterly payout has climbed from roughly $0.22 per share in its first year to $0.59 today, with notable steps along the way from $0.32 in 2020 to $0.36, $0.42, and $0.55 in subsequent years. The five-year compound annual growth rate (CAGR), which measures the average yearly growth of the payout, has run near 10% to 11%, well above the pace of inflation. The most recent increase took the dividend to $0.59 per share in 2023, a rise of about 7%. Since then, however, the company has held the payout flat, reflecting a more cautious stance as it navigates margin pressure and reinvests in its store base and supply chain.

Dividend Sustainability and Payout Ratio

Dollar General's dividend appears well-supported by underlying cash generation. Its payout ratio — the share of earnings distributed as dividends — sits at roughly one-third of earnings, a conservative level for a mature retailer. Coverage looks even stronger on a cash basis, with a free cash flow payout ratio of approximately 24%, meaning the company retains a substantial cushion after funding its dividend. This low payout ratio, combined with a debt-to-equity ratio near 0.7, suggests the company has meaningful flexibility to maintain the dividend even if earnings growth slows. The primary consideration for investors is that earnings have faced pressure from operating-cost inflation and store-level investments, which has contributed to the recent pause in dividend increases. Still, the modest payout leaves the dividend comfortably covered.

Dividend Compared to Industry Peers

Within the discount and broader consumer staples retail space, Dollar General's roughly 2% yield is moderate. Rival WMT (Walmart) generally offers a lower yield near 1%, reflecting its focus on share repurchases and lower payout, while TGT (Target) has historically offered a higher yield near 3%. Dollar Tree (DLTR), another direct discount-retail competitor, does not currently pay a dividend. Compared with the discount retail industry median of roughly 1.4% to 1.5%, Dollar General's payout is above average, though it remains below the typical consumer staples sector yield. This positioning underscores the company's identity as a steady, growing payer rather than a high-yield standout.

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Is This Stock Attractive for Dividend Investors?

Dollar General is likely most suitable for long-term, dividend growth investors who value consistency and compounding income over a high current yield. Its roughly 2% yield and double-digit historical payout growth make it a reasonable fit for investors building a diversified income portfolio with a multi-year horizon. The conservative payout ratio and strong free cash flow coverage also appeal to conservative investors who prioritize dividend safety. However, the recent pause in dividend increases and ongoing earnings pressure may give pause to investors specifically seeking rapid, predictable payout growth in the near term. Likewise, income-focused investors requiring a higher immediate yield will likely find other consumer staples names more compelling. Overall, the dividend profile is balanced: modest income today, with a long record of growth and a payout that remains well-protected.

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