Topic: Growth Stocks

DOMINO’S PIZZA $56.61 – New York symbol DPZ

DOMINO’S PIZZA $56.61 (New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 56.3 million; Market cap: $3.2 billion; Dividend yield: 1.4%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 10,040 outlets in the U.S. and over 70 other countries. Franchisees run most of these stores.

Excluding one-time items, the company’s earnings per share rose 25.5% in the quarter ended March 24, 2013, to $0.59 from $0.47 a year earlier. Sales rose 8.6%, to $417.6 million from $384.6 million. Samestore sales rose 6.5% internationally and 6.2% in the U.S.

Domino’s continues to boost its sales by aggressively promoting its new pizza recipes. The company is also profiting by moving into ordering online and through software applications, or apps, on smartphones. In addition, Domino’s still has lots of growth potential overseas.

The company’s long-term debt is still high, at $1.5 billion, or 47% of its market cap. However, it continues to steadily pay down its debt, and it has no major loans coming due until 2014.

Domino’s began paying dividends in March 2013 at a rate of $0.20 per quarter. The shares yield 1.4%.

The stock has jumped almost 226% for us over the past two years. It now trades at 24.6 times the company’s forecast 2013 earnings of $2.30 a share. However, the company’s long-term prospects remain strong.

Domino’s Pizza is still a buy.

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