Topic: Growth Stocks

DOMINO’S PIZZA $102.17 – New York symbol DPZ

DOMINO’S PIZZA $102.17 (New York symbol DPZ; TSINetwork Rating: Average)(734-930-3030; www.dominos.com; Shares outstanding: 55.6 million; Market cap: $5.7 billion; Dividend yield: 1.2%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 11,600 outlets in the U.S. and over 75 other countries. Franchisees run most of these stores.

In the three months ended December 28, 2014, the company’s earnings per share jumped 16.7%, to $0.91 from $0.78 a year earlier.

Overall sales gained 13.5%, to $643.0 million from $566.5 million. Same-store sales rose 6.1% internationally, but more important, they increased 11.1% in the U.S., which is home to most of the company’s stores.

Domino’s continues to profit from its move into ordering online and through smartphone apps. Half of its $2.0 billion of 2014 sales came from digital orders, and half of those were from mobile devices. The popular Domino’s Tracker app lets customers follow their pizza from the time they place their order through prepping, baking, boxing and delivering.

The company’s long-term debt is somewhat high, at $1.5 billion, or 35.7% of its market cap. However, it continues to steadily pay down that debt.

Domino’s raised its quarterly dividend by 24.0% with the March 2015 payment, to $0.31 from $0.25. The stock now yields 1.2%.

The company’s outlook is positive, and it’s still growing rapidly overseas. But the stock has doubled over the past two years and now trades at a high 29.9 times its forecast 2015 earnings of $3.42 a share.

Domino’s Pizza is a hold.

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