Can anything slow Dollar General (DG) down?Apparently not -- though that doesn't mean the stock is a good buy.

Net income at the Goodlettsville, Tenn., company rose to $171.2 million, or 50 cents a share, from $128.1 million, or 37 cents, a year earlier. Revenue rose more than 11% to $3.6 billion, fueled by increases in customer traffic and customer spending. The results beat Wall Street consensus forecasts of 47 cents on revenue of $3.57 billion.

The good news didn't stop there. Not only did the chain -- a favorite of Warren Buffett -- announce a $500 million stock buyback, but it also raised earnings guidance for fiscal 2011 to $2.29 to $2.32 per share from an earlier view of $2.22 to $2.30. That beat the $1.82 analysts had expected. Sales during that period will increase about 13%, with same-store sales raising 5.6% to 5.8%. 

The company expects to have opened 625 new stores in fiscal 2011. It operated 9,813 stores at the end of October.

Dollar General, whose shares have surged more than 30% this year, has the wind at its back. The chain, along with rivals Family Dollar (FDO) and Dollar Tree (DLTR), gained market share in the economic slowdown at the expense of larger rivals. The growth was one reason Wal-Mart (WMT) posted nine straight declines in U.S. same-store sales before breaking that slump in the third quarter. 

That trend should continue. Although surveys show consumers are growing more confident, they are still uneasy. Underemployment, which measures the percentage of unemployed workers along with part-time workers who want to work full time, was 18.1% in November, as Gallup notes. That is an increase from 17.8% a month ago and 17.2% a year ago.

Dollar General, though, may not be the best bet for investors who want to play this sector. Its shares trade at a price-to-earnings ratio of 21.1, above the 18.8 multiple of Family Dollar.

Family Dollar and Dollar Tree aren't cheap either. Both also recently posted better-than-expected​ quarterly results. Family Dollar plans to open as many 500 new stores in fiscal 2012 -- more than a 50% increase over 2011.

Dollar General shares have an average price target of $41.73, near the $40.43 it was trading at Monday. The target for Family Dollar is $58.25, below the $59.54 level where it recently traded. Dollar Tree's multiple is 21.82. The company opened 98 stores in the last quarter and expanded or relocated 24 stores. Its shares traded Monday at $83.57, near their average 52-week target of $85.11.

A better option for investors interested in the discount sector may be Wal-Mart, which trades at a price-to-earnings ratio of 13.08, among the lowest levels in five years. Its shares, which have been hurt by disappointing results, are up more than 8% this year. 

Big Lots (BIG)spooked investors last week with its cautious outlook for the holiday season. Its overall results, however, were good. The company also gave an earnings outlook in line with analysts' forecasts. The stock trades at a reasonable multiple of 13.31. Its shares, up more than 20% this year, are expected to reach $41.22 in the next 52 weeks. Big Lots traded Monday at $37.15.