Topic: How To Invest

Domino’s aims to continue its explosive overseas growth

Domino’s aims to continue its explosive overseas growth

DOMINO’S PIZZA (New York symbol DPZ; www.dominos.com) 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. Same-store 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 encouraging online orders as well as orders through software applications, or apps, on smartphones.

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Buying stocks: Domino’s shares have more than doubled in past year

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%.

In the latest edition of Stock Pickers Digest, we look at the company’s long-term prospects and in particular whether the potential for overseas growth remains strong. We also consider Domino’s earnings forecast and look at whether the shares can keep on rising. We conclude with our clear buy-hold-sell advice on this stock.

(Note: If you are a current subscriber to Stock Pickers Digest, please click here to view Pat’s recommendation. Be sure to log in first.)

COMMENTS PLEASE—Share your investment knowledge and opinions with fellow TSINetwork.ca members

Do you see any reason why fast food restaurants like Domino’s or McDonalds will not continue to experience robust growth around the globe? What would make you pick one fast food stock over another? Let us know what you think.

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