During the pandemic, Domino’s implemented savvy strategies to support its business. It’s now well-positioned to capitalize on its popular offerings to keep attracting customers.
It continues to add business in rapidly growing international markets while continuously innovating its menu offerings to attract new customers while retaining existing ones. The share price has responded accordingly by returning 25.1% in 2024 alone.
The stock trades at 31.4 times the company’s 2024 earnings forecast, a number we feel is justified thanks to its expanding global presence. This is a top pick for superior future returns.
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DOMINO’S PIZZA INC. (Symbol DPZ on New York; www.dominos.com) operates 20,591 outlets, in the U.S. and 85 other countries. Franchisees run most of these stores.
In the three months ended December 31, 2023, the company’s sales rose 0.8%, to $1.40 billion from $1.39 billion a year earlier. Same-store sales rose 2.8% in the U.S., while they rose 0.1% internationally. Excluding one-time items, earnings per share rose 1.1%, to $4.48 from $4.43.
Thanks to its strong global brand recognition, Domino’s can raise its prices to offset higher costs. It also continues to invest in its own delivery and takeout systems and technology. For instance, the company has installed GPS-enabled order tracking in the U.S. and is building more stores to cut down on delivery times.
Growth Stocks: Smart technology is boosting Domino’s Pizza’s dominance
Other digital technologies include the development of a robust digital ordering system and loyalty programs. These initiatives have been contributing to traffic gains and could enhance service speed, accuracy, and efficiency.
All in all, the pandemic was a boon for top pizza chains like Domino’s as consumers avoided public spaces and instead opted for delivery and curbside pickup. That boosted Domino’s, which was already outpacing rivals given its commitment to tech-enabled carry-out and delivery. Meantime, those moves are still paying off.
What’s more, Domino’s has been expanding its global presence, adding new stores both in the U.S. and internationally. This growth strategy could potentially increase its market share and revenues.
In the meantime, the firm raised its quarterly dividend by 24.8% with the March 2024 payment, to $1.51 from $1.21. The shares now yield 1.2%.
The stock now trades at a reasonable 31.4 times the $15.92 a share that Domino’s will probably earn in 2024.
All this bodes well for Domino’s profits—and future share price gains for investors.
Recommendation in Power Growth Investor: Domino’s Pizza is a buy.
