Dollar General (DG) stock is down 1.7% year-to-date (or YTD) and is currently trading at $72.81, which is ~33% below its 52-week high price. However, positive fiscal 4Q16 results could boost the company’s stock price in the short term. Close competitor Dollar Tree (DLTR) is down 3.4% YTD and is trading ~34% below its 52-week high.
In comparison, the performance of supermarkets has been much worse, as they have been hit hard by ongoing deflation in food products. Kroger (KR), SuperValu (SVU), and Sprouts Farmers Market (SFM) have lost 16.4%, 27%, and 0.6% of their value year-to-date.
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Dollar General (DG) can boost the long-term returns of its shareholders by paying regular quarterly dividends and repurchasing shares. In fiscal 2016, the company returned $1.3 billion to its investors via dividends and repurchasing shares.
During fiscal 2016, Dollar General repurchased 12.4 million shares valued at $990 million. Over the last five years, the company has repurchased 74.4 million shares for $4.6 billion. For the next fiscal year, the company expects to buy back ~$450 million of its common shares.
DG declared a dividend of $0.26 for fiscal 1Q16, an increase of 4% YoY. The company has paid regular dividends since it reinstated the dividend program in fiscal 2015.
Dollar General (DG) stock offers a dividend yield of 1.4%, lower than most dividend-paying retailers. The dividend yields of Walmart (WMT) and Target (TGT) are hovering around 2.6% and 4.6%, respectively.
Investors looking for exposure to Dollar General through ETFs can consider the VanEck Vectors Retail ETF (RTH), which invests 2.5% of its holdings in the company.