Quick verdict: COST vs DG in 2026

Dollar General (DG) appears to hold an overall edge in this 2026 stock comparison, winning 9 of 12 comparable metrics, particularly on valuation and profitability. Costco (COST) takes the lead as the growth champion with superior revenue expansion, while DG stands out for its healthier margins and attractive valuation multiples. Analysts lean slightly more favorably towards COST in terms of buy ratings, yet DG offers significantly higher projected price target and DCF upside according to current data. Not investment advice.

COST vs DG: key metrics side by side

Full side-by-side comparison of COST and DG across valuation, profitability, growth and analyst sentiment. Data updated 2026-05-07.

COST vs DG valuation comparison

When considering COST vs DG valuation, a significant divergence is immediately apparent. Costco Wholesale Corporation (COST) currently trades at a P/E ratio of 51.96x and a P/B ratio of 13.84x, reflecting a premium valuation that often accompanies its stable business model and consistent growth. This elevated multiple suggests that investors are willing to pay a high price for COST’s perceived quality and future earnings potential, although its discounted cash flow (DCF) analysis indicates a substantial overvaluation with a downside of -67.4% from its current price of $1000.54.

In stark contrast, Dollar General Corporation (DG) presents a much more appealing valuation profile for those seeking more attractively priced assets. DG’s P/E ratio stands at a modest 16.65x, and its P/B ratio is 2.96x, both considerably lower than COST. This indicates that DG stock is trading at a significant discount compared to its larger peer. Furthermore, the DCF model for DG suggests a remarkable upside of +194.5% from its current price of $114.36, highlighting a potentially undervalued asset if the model’s assumptions hold true. For investors prioritizing value in their search for the best stock, Dollar General clearly emerges as the more compelling option based on these valuation metrics.

COST vs DG growth comparison

Examining the growth trajectory for a COST vs DG stock comparison 2026 reveals different strengths. Costco Wholesale Corporation (COST) demonstrates robust top-line expansion, reporting a year-over-year revenue growth rate of +8.2%. This performance underlines COST’s ability to consistently increase sales, driven by its membership model and broad product offering that caters to a wide consumer base. Such steady revenue momentum is often a key indicator for growth-oriented investors looking for companies with expanding market presence and strong customer loyalty.

Dollar General Corporation (DG), while also growing, shows a slightly slower pace with a revenue growth rate of +5.2% year-over-year. While this is still a respectable growth rate, it trails behind Costco’s more accelerated expansion. It’s important to note that despite COST’s higher revenue growth, DG maintains superior profitability margins, with a net margin of 3.54% and an EBITDA margin of 7.61% compared to COST’s 2.99% net margin and 4.92% EBITDA margin. Therefore, while COST exhibits stronger revenue momentum, DG is more efficient at converting its sales into profit, a crucial aspect to consider for those evaluating overall business health and should I buy COST or DG stock in 2026.

COST vs DG profitability

In terms of profitability, the COST vs DG fundamentals reveal that Dollar General (DG) currently holds an advantage in several key areas. DG’s net margin stands at 3.54%, outperforming Costco’s (COST) net margin of 2.99%. This indicates that Dollar General is more effective at converting its revenue into actual profit after all expenses, including taxes, are accounted for. Similarly, DG’s EBITDA margin of 7.61% significantly surpasses COST’s 4.92%, demonstrating stronger operational efficiency before considering depreciation, amortization, interest, and taxes.

While both companies have an N/A% for Return on Equity (ROE), preventing a direct comparison on this specific metric, the Free Cash Flow (FCF) yield provides further insight into their cash-generating capabilities. Dollar General boasts a very impressive FCF yield of 12.24%, indicating a strong ability to generate cash relative to its market capitalization. Costco, by comparison, has an FCF yield of 2.05%. This substantial difference suggests that DG is generating significantly more free cash flow for every dollar of its market value, making it appear more attractive from a cash generation perspective and reinforcing its lead in profitability metrics.

Analyst ratings: COST vs DG

The analyst community provides a valuable perspective on the future prospects of both Costco Wholesale Corporation (COST) and Dollar General Corporation (DG). For COST, a total of 58 analysts cover the stock, with a strong majority of 65.5% issuing a “Buy” rating. The consensus among these experts is also a “Buy,” with an average price target set at $1070. This target suggests a potential upside of +6.9% from its current price of $1000.54. This high conviction from a large number of analysts underscores confidence in Costco’s continued performance and market position, making it a favorite for many institutional recommendations.

Dollar General (DG) is covered by 50 analysts, with a slightly lower, though still positive, percentage of “Buy” ratings at 54.0%. The overall analyst consensus for DG is also a “Buy.” However, what sets DG apart in this analysis is the projected upside from its analyst price target. The consensus target for DG is $145, representing a significant potential upside of +26.8% from its current price of $114.36. While fewer analysts are outright “Buy” on DG compared to COST, those who are see a much greater potential for price appreciation, suggesting that while COST is a safer bet, DG might offer more explosive returns based on analyst projections. Therefore, while analysts show a higher percentage of conviction for COST, DG offers more significant implied upside from current prices.

Should I buy COST or DG stock in 2026?

When considering whether should I buy COST or DG stock in 2026, the answer largely depends on your investment philosophy and what you prioritize in a portfolio. For growth-oriented investors, Costco (COST) presents a compelling argument. With a revenue growth rate of 8.2% year-over-year, it demonstrates a stronger top-line expansion compared to Dollar General’s 5.2%. Costco’s ability to consistently grow its sales and expand its membership base signals robust market momentum, making it an attractive option for those seeking companies with strong and reliable revenue trajectory, even if it comes with a premium valuation.

On the other hand, value investors will find Dollar General (DG) to be a far more appealing choice. DG boasts significantly lower valuation multiples, with a P/E ratio of 16.65x and a P/B ratio of 2.96x, which are substantially below COST’s 51.96x P/E and 13.84x P/B. Furthermore, DG’s discounted cash flow (DCF) analysis points to an impressive +194.5% upside, indicating a potentially deeply undervalued stock compared to COST’s -67.4% DCF downside. For those seeking assets that trade below their intrinsic value or offer a greater margin of safety, DG offers a clear advantage in the COST vs DG fundamentals and valuation comparison.

For investors focused on income, neither COST nor DG are traditionally considered high-yield dividend stocks, as their yields are quite minimal. However, in a direct comparison, Dollar General (DG) offers a slightly higher dividend yield of 0.02% compared to Costco’s (COST) 0.01%. While this difference is marginal and unlikely to be the primary driver for an income-focused investment, it technically makes DG the better option for dividend seekers between the two. Ultimately, the decision of should I buy COST or DG stock in 2026 hinges on whether you prioritize growth and market leadership (COST) or value and potential undervaluation with stronger profitability margins (DG). This is not investment advice; always conduct your own thorough research.

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