Big expansion pays off

Article Excerpt

DOMINO’S PIZZA $41.20 (New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 56.7 million; Market cap: $2.3 billion; No dividends paid) continues to benefit from its new pizza recipes, digital ordering and aggressive international expansion. The stock jumped over 7% on October 16, 2012, when the company reported higher earnings in the quarter ended September 9, 2012. Earnings per share jumped 22.2%, to $0.44 from $0.36 a year earlier. Same-store sales rose 3.3% in the U.S. and 5.0% internationally. Domino’s opened its 10,000th store in September. It now has 10,040 outlets in the U.S. and over 70 other countries. Franchisees run most of its stores. The company’s long-term debt is still very high, at $1.5 billion or 65% of its market cap. But Domino’s has cash flow of over $150 million per year and no major loans are due until 2019. The shares now trade at 21.2 times the company’s forecast 2012 earnings of $1.94 a share. However, its long-term prospects remain…