Dollar General vs. Dollar Tree: Which Stock Is the Better Buy Before Q2 Earnings?

Dollar General DG) and Dollar Tree DLTR) are set to report Q2 results before the opening bell on Thursday, August 27.

Both discount retailers are expected to post solid growth, but their valuation, stock performance, and shareholder-return profiles offer investors two different setups heading into earnings.

That said, let’s see which stock may be the better investment at the moment.

DG & DLTR's Q2 Expectations

For Dollar General, the Zacks Consensus calls for Q2 earnings of $2.00 per share, up more than 7% year over year, on sales of $11.17 billion, representing 4% growth. Continued value-seeking consumer traffic and improvements in shrink and merchandising could support results.

Dollar Tree is expected to deliver faster growth, with consensus estimates projecting Q2 EPS of $1.12, up more than 45% YoY, on sales of $4.85 billion, rising just over 6%. Wall Street is also looking for Dollar Tree comparable-store sales growth of around 3.1%, although tariffs and higher operating costs remain potential headwinds.

Stock Performance & Valuation Comparison

Dollar Tree has had the stronger year in the market, with DLTR shares up 7% in 2026, while DG is down 7%.

Over the last two years, DLTR has posted impressive gains of nearly 40%, roughly matching the broader market, with DG down 2% as Dollar General begins to move past elevated shrink, higher labor costs, and operational challenges.

However, Dollar General holds the valuation edge. At around $120 a share, DG trades at 16X forward earnings, with DLTR trading at 19X and more than $130 a share.

Optimistically, both stocks are trading beneath the broader Zacks Retail-Discount Stores Industry average of 25X forward earnings, which includes other noteworthy companies such as Target TGT) and Costco COST).

Dollar General Still Has the Edge for Income Investors

On top of a more appealing valuation, Dollar General is also the clear choice for income seekers, paying a quarterly dividend of $0.59 per share, or $2.36 annually, for a yield of nearly 2%.

Conversely, Dollar Tree doesn't offer a dividend, having historically retained cash for business investment and share repurchases.

Bottom Line: DG or DLTR Before Earnings?

Dollar Tree enters Q2 with stronger stock momentum and much faster expected earnings growth, but Dollar General's cheaper valuation and dividend give it a slight edge ahead of Thursday's report.

Looking poised for a potential rebound, Dollar General stock currently sports a Zacks Rank #2 (Buy), while Dollar Tree lands a Zacks Rank #3 (Hold) after an impressive rally in recent years.

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This article originally published on Zacks Investment Research (zacks.com).

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