How Much Will Dollar General Pay Out in Dividends in 2025?

Many investors enjoy receiving dividends. It's a way for companies to reward shareholders with regular income by paying out a portion of their profits.

Dollar General (NYSE: DG) has become a familiar name to many with its discount stores and long history of profitable sales growth. That enabled it to become a reliable dividend payer since initiating payouts in 2015.

The retailer hasn't been performing well lately, however. Dollar General has had tepid same-store sales and falling operating profitability. That's reflected in the share price, which has dropped more than 20% this year. With that backdrop, it's instructive to investigate what might happen to Dollar General's dividend payouts next year.

Image source: Getty Images.

Calculating the annual payout

Dollar General had raised dividends annually from 2016 through 2023. However, the rate has remained constant after Dollar General raised the quarterly payout from $0.55 to $0.59 in April 2023. That's not a good situation for dividend investors, who prefer consistent annual increases in the long run.

Hence, I'd assume the board of directors will keep the rate constant next year. With nearly 220 million common shares outstanding, Dollar General paid $259.5 million in dividends during the first half of the fiscal year. The period ended on Aug. 2.

Since management didn't repurchase any shares last year or in the first six months of the current year, it's a safe assumption that the number of shares will stay reasonably constant. That equates to about $519 million in dividend payments for the full year and a similar amount for next year.

On a positive note, the current dividends don't seem to be in danger. Dollar General has a 38% payout ratio And the shares have a healthy 2.8% dividend yield, more than double the S&P 500's 1.3%.

Nonetheless, given the pressure on Dollar General's earnings, I'd look elsewhere for companies that continue to perform well and raise dividends regularly.

Should you invest $1,000 in Dollar General right now?

Before you buy stock in Dollar General, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Dollar General wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $765,523!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of September 30, 2024

Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.