DG, Dollar General Corp
We are the largest discount retailer in the United States by number of stores, with 20,959 stores located in 48 U.S. states and Mexico as of February 27, 2026, with the greatest concentration of stores in the southern, southwestern, midwestern and eastern United States.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is led by Consumables (82%) and Seasonal (10%), with 2 more lines behind.
- What moves the needle
- Sales per store and how fast inventory moves. What decides it: same-store sales, inventory turns, and whether thin margins survive a price war.
- Is it a good business?
- Return on capital has run in the teens (median 18%, above 15% in 8 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 5% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Consumables is 82% of revenue, so this is largely a single-line business.
- Consumables82%$35.1B
- Seasonal10%$4.3B
- Home Products5%$2.2B
- Apparel3%$1.1B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2017–2026
realized figures from each filing, no estimates| 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMay 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $22.0B | $23.5B | $25.6B | $27.8B | $33.7B | $34.2B | $37.8B | $38.7B | $40.6B | $42.7B | $43.1B |
| Gross marginGross mgn | 31% | 31% | 30% | 31% | 32% | 32% | 31% | 30% | 30% | 31% | 31% |
| Operating marginOp. mgn | 9.4% | 8.6% | 8.3% | 8.3% | 10.5% | 9.4% | 8.8% | 6.3% | 4.2% | 5.2% | 5.3% |
| Net incomeNet inc. | $1.3B | $1.5B | $1.6B | $1.7B | $2.7B | $2.4B | $2.4B | $1.7B | $1.1B | $1.5B | $1.6B |
| EPS (diluted)EPS | $4.43 | $5.63 | $5.97 | $6.64 | $10.62 | $10.17 | $10.68 | $7.55 | $5.11 | $6.85 | $7.06 |
| Owner earningsOwner earn. | $1.0B | $1.2B | $1.4B | $1.5B | $2.8B | $1.8B | $424M | $692M | $1.7B | $2.4B | $2.2B |
| Owner earnings marginOE mgn | 4.8% | 4.9% | 5.5% | 5.2% | 8.4% | 5.2% | 1.1% | 1.8% | 4.2% | 5.6% | 5.1% |
| ROICROIC | 16% | 18% | 18% | 19% | 29% | 25% | 21% | 15% | 11% | 14% | 12% |
| Cash & investmentsCash+inv | $188M | $267M | $235M | $240M | $1.4B | $345M | $382M | $537M | $933M | $1.1B | $1.4B |
| Net debt / (cash)Net debt | $3.0B | $2.7B | $2.6B | $2.7B | $2.8B | $3.8B | $6.6B | $5.7B | $4.8B | $3.4B | $5.4B |
Owner’s Scorecard
Will it survive?
- ComfortableOperating income $2.2B ÷ interest expense $327M
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- ModerateTotal debt $4.6B ÷ operating income $2.2B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $3.4BModest net debtCash $1.1B − debt $4.6B
Netting $1.1B of cash and short-term investments against $4.6B of debt leaves $3.4B owed, about 1.6× a year's operating profit, versus the gross figure above. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Not enough data
The filing data didn't include the inputs for this check.
Is it a good business?
- SolidNOPAT $1.7B ÷ invested capital $11.9B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- SolidOwner Earnings $2.4B = operating cash $3.6B − capex $1.2B
What an owner could take out without starving the business. That's 6% of revenue. Treating stock comp as the real expense it is (less $91M of SBC) leaves $2.3B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $3.6B ÷ net income $1.5B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns most of itDividends + buybacks $3.3B ÷ Owner Earnings $2.4B
Of $2.4B Owner Earnings, $3.3B (137%) went back to shareholders, $520M dividends, $2.7B buybacks. Net of $91M stock comp, the real buyback was about $2.7B. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.19×MaintainingCapex $1.2B ÷ depreciation $1.0B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2017–2026
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 8 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 9% (FY2017) → 5% (FY2026)
Margins slipped over the record, competition or costs are biting in.
- Reinvestment, incremental ROIC 3%
Reinvested capital earned only a modest return, growth is getting expensive.
- Owner earnings growth +7%/yr
Free cash to owners grew about 7% a year over the record.
- Worst year 2025 · 4.2% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −2.7%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2017–2026
Over the record, the business generated $25.5B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a mature cash machine, most of what it earns goes straight back to owners.
- Reinvested$10.6B · 42%
- Dividends$4.0B · 16%
- Buybacks$11.5B · 45%
It reinvested $10.6B (42%) back into the business and returned $15.5B (61%) to owners, $4.0B in dividends, $11.5B in buybacks. Total debt rose $3.5B across the span. It returned and reinvested more than it generated, the gap was covered by debt or existing cash.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio114:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$91M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
3 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $42.7B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.13×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $4.6B vs $937M WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −2%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $6.85/share and book value $38.55/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Dollar General Corp has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $2.2B on 222M diluted shares; net debt $5.4B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2026
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationBusiness
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“We believe that we differentiate ourselves from other forms of retailing by offering competitive prices in a convenient, small-store format, and by operating our stores in close proximity to our customers, with approximately 75% of the U.S. population located within five miles of a Dollar General st…”
From the recordRevenue exposed (TTM)$43.1B - Pricing power & competitionBusiness
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Our ability to deliver highly competitive prices in convenient locations and our easy "in and out" shopping format create a compelling shopping experience that we believe distinguishes us from other discount retailers as well as convenience, drug, grocery, online and mass merchant retailers.”
From the recordOperating margin5.3% now (TTM), off a 10.5% peak (FY2021) - Supplier & input dependenceMD&A
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“We source our merchandise from a wide variety of domestic and international suppliers, and we depend on them to supply merchandise in a timely and efficient manner and in the large volumes that we may require.”
From the recordGross-margin cushion (TTM)31% - Concentrated dependenceMD&A
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Our plans depend significantly on strategies, initiatives and investments designed to increase sales and profitability and improve the efficiencies, costs and effectiveness of our operations, and failure to achieve or sustain these plans could materially affect our results of operations.”
From the recordOwner-earnings margin at stake (TTM)5% - Debt terms & refinancingMD&A
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“The Senior Indenture contains covenants limiting, among other things, our ability (subject to certain exceptions) to consolidate, merge, or sell or otherwise dispose of all or substantially all of our assets; and our ability and the ability of our subsidiaries to incur or guarantee indebtedness secu…”
From the recordBalance sheet (TTM)$3.4B modest net debt · interest covered 6.7× - Litigation & contingenciesMD&A
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“The outcome of legal proceedings, particularly class action or multi-district litigation or mass arbitrations and regulatory actions, can be difficult to assess or quantify.”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyMD&A
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“These laws and regulations may include, but are not limited to, requirements relating to hazardous waste materials, recycling and recycled/recyclable product content, single-use plastics, extended producer responsibility, use of refrigerants, carbon pricing or carbon taxes, product energy efficiency…”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2026 vs FY2025
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “There are also risks associated with our continued integration of artificial intelligence and machine learning within our technology systems (for example, if the types of information that applications with embedded artificial intelligence assist in producing are or are alleged to be deficient, inacc…”
- “Furthermore, if our competitors or third parties incorporate artificial intelligence into their businesses more quickly or more successfully than us, it could impair our ability to compete effectively and adversely affect our results of operations, or if our use of artificial intelligence is inaccur…”
- “Further, we pay interchange and other processing fees related to our acceptance of debit and credit card payments, and these fee amounts could continue to increase over time, as a result of customers shifting their payments from cash to credit/debit card and/or our fee rates rising, thereby raising …”
- “The primary expenses that were higher as a percentage of net sales in 2025 were incentive compensation and repairs and maintenance, partially offset by lower impairment charges primarily due to the store portfolio optimization review completed in 2024 as discussed in Note 12 to the consolidated fina…”
- “There are also risks associated with our continued integration of artificial intelligence and machine learning within our technology systems (for example, if the types of information that applications with embedded artificial intelligence assist in producing are or are alleged to be deficient, inacc…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Discount & variety retail
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| WMTWalmart Inc. | $706.4B | 24% | 4.2% | 18% | 2% |
| COSTCostco Wholesale Corp. | $275.2B | 13% | 3.8% | 37% | 3% |
| TGTTarget Corp. | $104.8B | 28% | 4.9% | 16% | 3% |
| DGDollar General Corp | $42.7B | 31% | 5.2% | 14% | 6% |
| DLTRDollar Tree, Inc. | $19.4B | 36% | 8.5% | 23% | 8% |