Dollar General Corp. (DG): Has It Become the Perfect Stock?

The fiscal cliff debate at the beginning of the year, however, hit low-income shoppers hardest, as the disappearance of temporary payroll tax reductions increased withholding and reduced take-home pay for workers of all income levels. The resulting decline had Wal-Mart Stores, Inc. (NYSE:WMT) asking where all of its customers had gone, as it issued cautious guidance about the current quarter. Similarly, just last week, teen-discounter Five Below Inc (NASDAQ:FIVE) announced strong past results but forecast weaker guidance for the current quarter, sending shares downward on fears that its growth might not be sustainable.

Yet Dollar General Corp. (NYSE:DG) hasn’t seen those pressures yet. In its most recent quarterly earnings report, Dollar General managed to set record highs for the fourth quarter and the full 2012 year in terms of revenue, net profit, and earnings per share. The company also said that it expects year-over-year sales growth of 10% to 12%, with similar percentage gains in earnings per share as well.

For Dollar General Corp. (NYSE:DG) to improve, it needs its expansion to produce not just higher revenue but also better margins and earnings growth. Otherwise, the Dollar General Corp. (NYSE:DG) store may never get much closer to perfection.

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The article Has Dollar General Become the Perfect Stock? originally appeared on Fool.com is written by Dan Caplinger.

Fool contributor Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned.

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