Head-To-Head Comparison: Domino’s Pizza (NASDAQ:DPZ) versus Papa John’s International (NASDAQ:PZZA)

Domino’s Pizza (NASDAQ:DPZ) and Papa John’s International (NASDAQ:PZZA) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, dividends, valuation, earnings, profitability and analyst recommendations.

Profitability

This table compares Domino’s Pizza and Papa John’s International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Domino’s Pizza	11.89%	-15.04%	33.66%
Papa John’s International	1.37%	-10.71%	5.33%

Earnings and Valuation

This table compares Domino’s Pizza and Papa John’s International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Domino’s Pizza	$4.94 billion	2.04	$601.70 million	$17.37	17.40
Papa John’s International	$2.05 billion	0.56	$30.53 million	$0.83	41.84

Domino’s Pizza has higher revenue and earnings than Papa John’s International. Domino’s Pizza is trading at a lower price-to-earnings ratio than Papa John’s International, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for Domino’s Pizza and Papa John’s International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Domino’s Pizza	2	12	17	0	2.48
Papa John’s International	0	8	2	0	2.20

Domino’s Pizza presently has a consensus price target of $419.74, suggesting a potential upside of 38.85%. Papa John’s International has a consensus price target of $38.50, suggesting a potential upside of 10.86%. Given Domino’s Pizza’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Domino’s Pizza is more favorable than Papa John’s International.

Insider and Institutional Ownership

94.6% of Domino’s Pizza shares are owned by institutional investors. 0.9% of Domino’s Pizza shares are owned by company insiders. Comparatively, 1.8% of Papa John’s International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Domino’s Pizza has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Papa John’s International has a beta of 1.18, suggesting that its stock price is 18% more volatile than the S&P 500.

Dividends

Domino’s Pizza pays an annual dividend of $7.96 per share and has a dividend yield of 2.6%. Papa John’s International pays an annual dividend of $1.84 per share and has a dividend yield of 5.3%. Domino’s Pizza pays out 45.8% of its earnings in the form of a dividend. Papa John’s International pays out 221.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Domino’s Pizza has raised its dividend for 12 consecutive years and Papa John’s International has raised its dividend for 4 consecutive years.

Summary

Domino’s Pizza beats Papa John’s International on 12 of the 17 factors compared between the two stocks.

About Domino’s Pizza

Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

About Papa John’s International

Papa John’s International, Inc. engages in the operation and franchise of pizza delivery and carryout restaurants. It operates through the following segments: Domestic Company-owned Restaurants, North America Franchising, North America Commissaries, International Operations, and All Others. The Domestic Company-Owned Restaurants segment consists of retail sales of pizza and side items, breadsticks, cheese sticks, chicken poppers and wings, dessert items, and canned and bottled beverages. The North America Franchising segment involves the offering of sales and support activities, development rights, and collection of royalties from franchisees located in the United States and Canada. The North America Commissaries segment includes the eleven full-service regional dough production and distribution and quality control centers. The International Operations segment represents all restaurant operations outside of the United States and Canada. The All Others segment focuses on franchise contributions to marketing funds and sale, company-owned and franchised restaurants, information systems and related services used in restaurant operations, point-of-sale system, online and other technology-based ordering platforms, printing, and promotional items. The company was founded by John H. Schnatter in 1984 and is headquartered in Louisville, KY.