Want A Better Bang For Your Buck? Here Are 3 Dividend Stocks In The Discount Retail Sector

Zinger Key Points
  • In the second quarter of 2022, Dollar General repurchased $349 million of its common stock, or 1.5 million shares.
  • Big Lots is offering a dividend yield of 5.57%, or $1.20 per share annually, using quarterly payments.
Want A Better Bang For Your Buck? Here Are 3 Dividend Stocks In The Discount Retail Sector

As high inflation forces the average consumer to prioritize necessities over wants, many shoppers are cutting back on discretionary spending.

This can be attributed to the decrease in purchasing power due to higher consumer staples and energy bills, although people are purchasing fewer goods.

One way consumers can combat higher spending is by shopping at their local discount stores to receive a better “bang for their buck.” And, during times of recession or high inflationary pressures, it is not uncommon for consumers to venture out to discount stores where they can find the same product at a steep discount.

Here are three discount retailers that are offering dividends as the potential for a recession increases.

Big Lots Inc BIG is offering a dividend yield of 5.57%, or $1.20 per share annually, using quarterly payments. The company has an inconsistent track record of increasing its dividends as it has not been raised since 2018.

Big Lots is principally engaged in operating discount retail stores, providing a broad range of merchandise, including food, consumables, soft home products, hard home products, furniture, electronics and accessories, and seasonal products.

Big Lots did not execute any share repurchases during the quarter, and has $159 million remaining under its December 2021, $250 million authorization.

Ross Stores, Inc. ROST is offering a dividend yield of 1.43%, or $1.24 per share annually, through quarterly payments. The company has a decent track record of increasing its dividends, already once in the past year.

As of 2021, Ross Stores is a leading American off-price apparel and home fashion retailer, operating more than 1,920 stores, selling a variety of name-brand products and aiming to undercut conventional retailers' regular prices by 20% to 70%.

CEO Barbara Rentler commented, “During the second quarter, we repurchased 2.9 million shares of common stock for an aggregate price of $235 million. As previously announced, we expect to buy back $950 million of common stock during fiscal 2022 under our two-year $1.9 billion repurchase program that extends through fiscal 2023.”

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Dollar General Corp. DG is offering a dividend yield of 0.92% or $2.20 per share annually, making quarterly payments. The company has a strong track record of increasing its dividends over the past eight years.

Dollar General Corp is a leading American discount retailer with more than 18,000 stores in 47 states, selling branded and private-label products across a wide variety of categories.

In the second quarter of 2022, Dollar General repurchased $349 million of its common stock, or 1.5 million shares, at an average price of $233.36 per share, with an authorized $1 billion not used. On Aug. 24, 2022, the company’s board of directors increased the authorization under the share repurchase program by $2.0 billion.

 

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