Stock (Symbol) |
Domino’s Pizza (DPZ) |
Stock Price |
$230 |
Sector |
| Food & Necessities |
Data is as of |
| April 15, 2017 |
Expected to Report |
| Apr 25 |
Company Description |
 Domino’s Pizza, Inc. is a pizza restaurant chain company. As of January 1, 2017, the Company operated in over 13,800 locations in over 85 markets around the world. The Company operates through three segments: domestic stores, international franchise and supply chain. Its basic menu features pizza products in various sizes and crust types. Source: Thomson Financial |
Sharek’s Take |
 Domino’s (DPZ) continues to evolve into a tech juggernaut, which happens to be in the restaurant industry. Domino’s Hotspots will now deliver your grub to parks, beaches, and stadiums across the nation — just in time for Summer! This new catalyst will push profits higher, not that they needed help. DPZ’s profits are growing around 37% right now (2017/2018 est.) while beating the street and upping estimates along the way. This qtr, 2018 estimates jumped from $6.89 to $8.03. Some of that is the tax rate dropping from 31% to 24%. Founded as a single store in 1960, Domino’s is the world’s #2 pizza chain and #1 pizza delivery chain. It generates sales and profits by charging franchisees royalties and selling them food & equipment. Half DPZ’s sales come from the US, Half internationally with the Intl store count jumping from less than 5000 to 9000 during 2011-2017. DPZ has been one of the market’s top stocks the past decade. And the reason was better food and new technology. In 2009 the company changed its pizza recipe (as the pizza tasted bad) and in 2011 improved its chicken items, cheesy bread, and launched a new app with Pizza Tracker. DPZ broke out on May 5, 2011 when it jumped from $19 to $21 after the company reported profit growth of 20%. Profits surged 25% in 2011. The stock became a ten-bagger within ten years. Management buys back hundreds of millions of dollars in shares in addition to paying a dividend of 1%. Share buybacks helped 2017 profits (EPS) by $0.18 in 2017 and after such strong year management boosted the dividend 20% to $2.20 annually. DPZ is a top-tier growth stock and is a big part of the Growth Portfolio and Aggressive Growth Portfolio. I envision the stock — and the company — will continue to achieve success. |
One Year Chart |
 DPZ’s numbers look great, but people were negging on the stock because same-store sales dipped below 10% (they had been growing double-digits for a while). The last qtr, sales grew 12% with SSS grew 4% in the US and 3% Internationally. Yes, that’s slowing same-store sales growth. So the pundits were right, but profits look so good. 41% profit growth beat estimates of 33%. Qtrly Estimates surged and now call for 40%, 31%, 42% and 31% profit growth the next 4 qtrs. P/E is only 29, for this 27% grower (not 21% like the analysts think). |
Fair Value |
 This stock had a median P/E of 32 the last two years and I feel that’s a fair valuation for this stock. That means the stock has decent upside this year and solid upside into 2019. |
Bottom Line |
 Domino’s has been one of the best stocks of our time, and with the new delivery options, I imagine the stock will continue to trend higher. I’m so impressed with the charts here. It’s amazing to see!. DPZ ranks 12th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. I would ranks the stock higher if it was on a dip. |
Power Rankings |
Growth Stock Portfolio
12 of 39Aggressive Growth Portfolio 12 of 19Conservative Stock Portfolio N/A |
