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.

general dollar (DG 2.97%) has become a household name to many with its discount stores and long history of profitable sales growth. This has allowed it to become a reliable dividend payer since it started paying in 2015.

However, the retailer has not performed well in recent times. Dollar General had tepid same-store sales and declining operating profitability. This is reflected in the share price, which is down more than 20% this year. Against this backdrop, it’s instructive to investigate what could happen to Dollar General’s dividend payments next year.

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Calculation of the annual payment

Dollar General raised its dividend annually from 2016 to 2023. However, the rate remained flat after Dollar General raised its quarterly payout from $0.55 to $0.59 in April 2023. This is not a good situation for dividend investors, who prefer consistent annual growth over the long term. run.

Therefore, I would assume that the board will keep the rate constant next year. With nearly 220 million shares of common stock outstanding, Dollar General paid out $259.5 million in dividends in the first half of its fiscal year. The period ended on August 2.

Since management did not repurchase any shares last year or in the first six months of the current year, it is a safe assumption that the number of shares will remain reasonably constant. This equates to approximately $519 million in dividend payments for the full year and a similar amount for next year.

On a positive note, current dividends do not appear to be in danger. Dollar General has a payout ratio of 38%, and the stock has a healthy dividend yield of 2.8%, more than double S&P 500is 1.3%.

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