Analyzing Domino’s Pizza (DPZ) and The Competition

Domino’s Pizza (NASDAQ:DPZ) is one of 383 publicly-traded companies in the “Hotels, Restaurants & Leisure” industry, but how does it contrast to its rivals? We will compare Domino’s Pizza to similar businesses based on the strength of its risk, profitability, valuation, earnings, institutional ownership, analyst recommendations and dividends.

Volatility & Risk

Domino’s Pizza has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Domino’s Pizza’s rivals have a beta of 1.44, suggesting that their average stock price is 44% more volatile than the S&P 500.

Profitability

This table compares Domino’s Pizza and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Domino’s Pizza	12.03%	-15.48%	34.38%
Domino’s Pizza Competitors	8.51%	-42.00%	2.07%

Dividends

Domino’s Pizza pays an annual dividend of $7.96 per share and has a dividend yield of 2.4%. Domino’s Pizza pays out 43.9% of its earnings in the form of a dividend. As a group, “Hotels, Restaurants & Leisure” companies pay a dividend yield of 3.2% and pay out 39.1% of their earnings in the form of a dividend. Domino’s Pizza has raised its dividend for 12 consecutive years. Domino’s Pizza lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Domino’s Pizza and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Domino’s Pizza	1	15	15	1	2.50
Domino’s Pizza Competitors	3832	17319	25640	908	2.50

Domino’s Pizza currently has a consensus target price of $380.87, indicating a potential upside of 14.30%. As a group, “Hotels, Restaurants & Leisure” companies have a potential upside of 59.32%. Given Domino’s Pizza’s rivals higher possible upside, analysts plainly believe Domino’s Pizza has less favorable growth aspects than its rivals.

Institutional and Insider Ownership

94.6% of Domino’s Pizza shares are owned by institutional investors. Comparatively, 48.6% of shares of all “Hotels, Restaurants & Leisure” companies are owned by institutional investors. 0.9% of Domino’s Pizza shares are owned by company insiders. Comparatively, 22.0% of shares of all “Hotels, Restaurants & Leisure” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Domino’s Pizza and its rivals gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Domino’s Pizza	$5.07 billion	$601.70 million	18.36
Domino’s Pizza Competitors	$3.74 billion	$250.18 million	-162.06

Domino’s Pizza has higher revenue and earnings than its rivals. Domino’s Pizza is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Domino’s Pizza beats its rivals on 9 of the 15 factors compared.

About Domino’s Pizza

Domino’s Pizza, Inc. is a global pizza company that operates and franchises restaurants specializing in delivery and carryout. Its menu includes pizzas, chicken wings, sandwiches, pasta, bread sides, desserts and beverages, with offerings varying by location. The company traces its roots to a pizza shop opened in Ypsilanti, Michigan, in 1960. It adopted the Domino’s Pizza name in 1965 and has since grown through a predominantly franchised business model, serving customers in the United States and international markets.