Jim Cramer: this discount retailer is a good pick for recession

Shares of Dollar General Corp (NYSE: DG) are down about 5.0% for the year, but CNBC’s Jim Cramer still sees a good reason to own this stock.

What’s there to like in Dollar General

His remarks are interesting considering the discount retailer only recently reported weak results for its fiscal Q4, and offered tepid guidance for the current quarter. Explaining what’s there to like in DG on Mad Money, Cramer said:

Dollar General Corporation’s full-year forecast was still much more bullish, which allowed the stock to rally. Doesn’t hurt that they’ve got an aggressive expansion plan that Wall Street greeted with enthusiasm.

The Tennessee-headquartered company is targeting 1,110 new store openings in its fiscal 2022.

Dollar General recently raised its dividend

More than anything, however, the famed investor likes Dollar General Corp because it’s a suitable pick for times when there’s talk of a recession. He noted:

At 19 times this year’s earnings estimates, Dollar General is relatively cheap. It pays a dividend and just raised the payout by 31%. If you want consistency, that’s Dollar General. Needless to say, it’s what you buy when people think we’re going into a recession.

Dollar General is keeping its prices firm at $1.0 despite record inflation, which Cramer says is a great long-term strategy for customer acquisition.  

The post Jim Cramer: this discount retailer is a good pick for recession appeared first on Invezz.

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