Buy Domino’s, hold on to Chipotle

Article Excerpt

DOMINO’S PIZZA $42.06 (New York symbol DPZ; TSINetwork Rating: Average) (734-930-3030; www.dominos.com; Shares outstanding: 56.8 million; Market cap: $2.4 billion; No dividends paid) 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 in other countries. Franchisees run most of these stores. In the quarter ended September 9, 2012, the company’s earnings per share rose 22.2%, to $0.44 from $0.36 a year earlier. Sales rose slightly, to $378.1 million from $376.3 million. Same-store sales rose 5.0% internationally and 3.3% in the U.S. Domino’s continues to boost its sales by aggressively promoting its new pizza recipes. It’s also profiting by moving into digital ordering on the Internet 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 very high, at $1.5 billion, or 63% of its market cap. However, it continues to steadily pay down its debt,…