The fast food industry is notoriously competitive. It can give rise to some powerful growth stocks—but it is not always easy for companies to keep growing. Today we examine the world’s largest pizza takeout chain to see whether it can sustain the success it has had in 2011. DOMINO’S PIZZA $32.21 (New York symbol DPZ; www.dominos.com) is the world’s largest chain of pizza stores that offer takeout and delivery. The company operates 9,541 stores in the U.S. and over 70 other countries. Franchisees run most of these outlets. In the three months ended September 11, 2011, Domino’s earnings per share jumped 33.3%, to $0.36 from $0.27. Sales rose 8.3%, to $376.3 million from $347.4 million. U.S. same-store sales rose 3.0%. International same-store sales jumped 8.1%. International sales have risen for 71 consecutive quarters, and should keep growing. Domino’s plans to add 300 stores a year outside the U.S., and has lots of room to expand in Europe, Latin America and Asia. [ofie_ad]
Growth stocks: Domino’s shares rose 130% over the past year
Domino’s continues to boost its sales by aggressively promoting its “New Inspired Pizza.” The company has changed its main pizza recipe by adding new tomato sauces and cheeses, as well as seasoned crusts. Domino’s long-term debt is still very high, at $1.5 billion, or 75% of its market cap. However, the company continues to steadily pay down its debt, and it has no major loans coming due until 2014. The shares have risen 130.0% for us over the past year. They now trade at 17.7 times the company’s forecast 2012 earnings of $1.82 a share. In the latest edition of Stock Pickers Digest, we look at whether Domino’s innovations in new products will help it maintain its record of success—and whether its shares can go higher. We conclude with our clear buy-hold-sell advice. If you’re looking for growth stocks with the potential for gains of 50% or more in 6 months or less, you should subscribe to Stock Pickers Digest. The latest issue of Stock Pickers Digest gives you our full analysis, including clear buy/sell/hold advice, on 20 stocks that may be suitable for the part of your portfolio you devote to aggressive investing. What’s more, you can get this issue ABSOLUTELY FREE. Click here to learn how.
