Dollar Tree vs Dollar General: Which Discount Retailer Delivers the Smarter Return for Your Portfolio?

Core Insights - Dollar Tree and Dollar General are both currently undervalued, presenting potential investment opportunities for retirement-focused investors [3] Financial Performance - Dollar Tree reported Q4 FY2025 EPS of $2.56, with full-year adjusted diluted EPS at $5.75, and guidance for FY2026 adjusted EPS between $6.50 and $6.90, averaging $6.70 [2][5] - Dollar General's forward P/E is approximately 18x based on FY2026 guided EPS of $7.10 to $7.35, while Dollar Tree's forward P/E is around 16x [2][5] - Dollar Tree's revenue grew by 10.43% to $19.41 billion in FY2025, with net income surging by 140.44%, while Dollar General experienced a 32.27% decline in net income for FY2024 [5][7] Market Dynamics - Dollar Tree's transformation into a pure-play retailer has attracted 3 million new households, with 60% from the $100,000-plus income bracket, indicating a shift in consumer behavior [7] - Institutional investors such as AllianceBernstein and Schroder have been accumulating Dollar Tree shares following its recent earnings report, despite a 14.75% decline in its stock price over the past month [4][8] Investment Considerations - Dollar General offers a consistent dividend yield of approximately 1.74% and has a low beta of 0.22, appealing to income-focused investors [4][9] - Dollar Tree's stock is trading below its 200-day moving average of $110.32, suggesting potential for growth as its earnings momentum continues [10]