Family Dollar Stores, Inc. (FDO): This Dollar Store Continues to Shine

Dollar Tree repurchased 1.5 million of its own shares during the first quarter, and still has nearly $800 million left on its existing share repurchase authorization.

Year to date, Dollar General has repurchased approximately $220 million of its common stock, with approximately $424 million remaining in its existing program.

There’s still plenty of room to grow

I first wrote about the three major dollar stores in January, with a particular emphasis on Family Dollar. I was extremely fond of the stock then, as it had been stuck in a downtrend even though its recent earnings reports were very positive. At the time, Family Dollar exchanged hands for $58 per share, which I felt was an absurdly low valuation for a growing company.

Back in January, I had a positive view on not just Family Dollar Stores, Inc. (NYSE:FDO), but Dollar General and Family Dollar. Quite simply, the continuing struggles of the American consumer were a huge tailwind for the dollar stores coming in to the year, and I believe those same conditions will exist for the foreseeable future. I maintain a positive view of all three stocks today, and wouldn’t be shy about committing capital to these names, even after such impressive rallies.

I continue to favor Family Dollar Stores, Inc. (NYSE:FDO) out of the group, for its more shareholder-friendly policies. Earlier this year, Family Dollar increased its dividend by more than 23%, which represented the 37^th annual dividend increase for the company. This is in addition to the newly authorized $300 million share buyback program. While each dollar store is worthy of investment, I continue to advise my fellow Foolish investors to favor Family Dollar, and consider adding it to your portfolio.

The article This Dollar Store Continues to Shine originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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