5 Best Grocery Stocks to Buy

4. Dollar General Corporation (NYSE:DG)

Number of Hedge Fund Holders: 59

Dollar General Corporation (NYSE:DG) is a discount retailer headquartered in Goodlettsville, Tennessee. The company has over 18,000 stores across the US. It was founded in 1939 and in 2003 entered the grocery store business. Dollar General Corporation (NYSE:DG) has over 160,000 employees.

Dollar General Corporation (NYSE:DG) reported its Q3 2022 earnings on December 2. The company’s revenue was up 11.1% YoY to $9.46 billion, outperforming the market estimates by $70 million. However, the EPS of $2.33 lagged behind the analyst estimates of $2.55. Despite the miss, Dollar General Corporation (NYSE:DG)’s EPS was up by 12% from Q3 2021.

On December 1, Dollar General Corporation (NYSE:DG) declared a $0.55 quarterly dividend, payable by January 17, to the shareholders of record on January 3. Dollar General Corporation (NYSE:DG) has been raising its dividend for the past six years and as of December 2, the company has a dividend yield of 0.90%. Furthermore, in the third quarter, the company repurchased shares worth $546 million with $2.5 billion worth of shares still remaining under the current repurchase program.

Here is what Aristotle Capital specifically said about Dollar General Corporation (NYSE:DG) in its Q2 2022 investor letter:

“Dollar General Corporation (NYSE:DG) contributed to performance in the second quarter following the report of first quarter earnings that were above expectations. Strength in the second quarter was driven by better-than-expected sales of consumable items. Guidance for the remainder of the year was increased. In addition to solid earnings, forecasts for the increasing expectations of a recession drove positive sentiment towards consumer discretionary companies with more predictable revenue like dollar stores.”