Topic: Growth Stocks

DOMINO’S PIZZA $75.43 – New York symbol DPZ


DOMINO’S PIZZA $75.43
(New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 55.6 million; Market cap: $4.2 billion; Dividend yield: 1.3%) is the world’s largest chain of pizza stores that offer takeout and delivery. It operates 11,000 outlets in the U.S. and over 70 other countries. Franchisees run most of these stores.

In the quarter ended June 15, 2014, the company’s earnings per share rose 17.5%, to $0.67 from $0.57 a year earlier. That beat the consensus estimate of $0.65. Sales gained 8.8%, to $450.5 million from $414.0 million also exceeding the consensus estimate of $441.3 million. Same-store sales rose 7.7% internationally and 5.4% in the U.S.

Domino’s continues to boost sales by promoting new pizza recipes and other menu items, It’s also aggressively promoting bundle deals, such as including a free two-litre Pepsi with a pizza.

Meantime, Domino’s is profiting by moving into ordering online and through smartphone apps. And it’s still rapidly growing overseas.

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

The outlook for Domino’s is positive, but the stock has jumped over 136% for us in the past two years. It now trades at a high 26.5 times the company’s forecast 2014 earnings of $2.85 a share.

Domino’s Pizza is a hold.

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