The 2.8% Social Security increase announced this week is good news for value retailers like Big Lots Inc. BIG, +2.56% Dollar Tree Inc. DLTR, +1.14% and Dollar General Corp. DG, +2.51% according to Raymond James analysts. The hike is the biggest since 2012. “As a reminder, the core customer for Dollar General and Family Dollar has an annual household income of $35K or less,” analysts led by Dan Wewer wrote. “The marginal propensity to consume for low-income families is ~100%, therefore, some of the Social Security benefit increase should find its way into a value retailers’ store.” Raymond James rates Dollar General strong buy with a $122 price target; Dollar Tree is rated outperform with a $90 price target; and Big Lots is rated outperform with a $48 price target. Dollar General shares have gained 12.7% for the year to date, Dollar Tree stock has fallen 24.7%, and Big Lots shares are down about 24% for the year to date. The S&P 500 index SPX, +0.90% is up 3.5% for 2018 so far.

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