Owing to gloomy revenue and profit forecast from its larger rival Walmart (WMT) - Get Walmart Inc. Report , shares of Dollar General (DG) - Get Dollar General Corporation Report have gotten punished, falling as much as 9% in the past three month -- just shy of a new 52-week low of $62.62. At around $65 a share, Dollar General stock is down more than 7% in 2015. Walmart's struggles shouldn't spell doom for Dollar General, however.

Dollar General, headquartered in Goodlettsville, Tenn., reports third-quarter fiscal 2015 earnings results ahead of the opening bell Thursday. And with the company having just joined the ranks of the dividend payers, implying strong confidence in its capital position, there are tons of reasons to be confident DG shares will rebound in the quarters ahead.

For the quarter that ended in October, analysts on average expect Dollar General to earn 87 cents a share on revenue of $5.1 billion, translating to year-over-year growth of 10% and 8%, respectively. For the full year, ending in Jan. 2016, earnings are projected to climb 12% year-over-year to $3.93 a share, while revenue of $20.43 billion would yield a year-over-year increase of about 8%.

TheStreet Recommends

All told, the revenue and profit projections don't imply Dollar General's business is struggling as its recent stock performance would indicate. So, with DG shares now trading at just 17 times earnings -- four points below the S&P 500 (SPX) -- now's the time to own one of the better-run discount retailers in the U.S.

Consider, only five months ago, DG shares traded all-time highs of around $81. Like its dollar-priced merchandise, investors can now own these shares at a discount. Not only does the stock have a consensus buy rating, its average analyst 12-month price target of $83 suggests some 27% gains from current levels of around $65. Not to mention, the company plans to buy back some 5% of its outstanding shares over the next year, based on the $1.3 billion shares remaining on its current buyback authorization.

In other words, Dollar General thinks its stock is cheap, too. Why the implied confidence by management? Dollar General, which plans to increase its store count by 7% annually in the next two years, has come up with a growth strategy to better compete with smaller rivals like Dollar Tree (DLTR) - Get Dollar Tree, Inc. Report , which outbid Dollar General for Family Dollar (FDO) .

The increased retail locations not only will help Dollar General offer its customers more convenient places to shop, it will help offset any advantage created with Dollar Tree and Family Dollar joining forces. At the same time, Dollar General's increased retail presence will hep it fight Walmart, which has warned of profit weakness due to increase worker pay, among other things. Given these factors, buy DG stock and hold for the long term.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.