DOMINO'S PIZZA INC (DPZ) Stock Fundamental Analysis
NASDAQ:DPZ - Nasdaq - US25754A2015 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to DPZ. DPZ was compared to 131 industry peers in the Hotels, Restaurants & Leisure industry. DPZ scores excellent on profitability, but there are some minor concerns on its financial health. DPZ is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DPZ was profitable.
In the past year DPZ had a positive cash flow from operations.
In the past 5 years DPZ has always been profitable.
In the past 5 years DPZ always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 32.97%, DPZ belongs to the top of the industry, outperforming 99.24% of the companies in the same industry.
DPZ's Return On Invested Capital of 588.92% is amongst the best of the industry. DPZ outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DPZ is significantly above the industry average of 15.73%.
The last Return On Invested Capital (588.92%) for DPZ is above the 3 year average (227.47%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 32.97% | ||
| ROE | N/A | ||
| ROIC | 588.92% |
ROA(3y)30.95%
ROA(5y)30.95%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)227.47%
ROIC(5y)158.69%
1.3 Margins
DPZ has a better Profit Margin (12.49%) than 80.15% of its industry peers.
In the last couple of years the Profit Margin of DPZ has grown nicely.
DPZ has a Operating Margin of 18.90%. This is in the better half of the industry: DPZ outperforms 76.34% of its industry peers.
DPZ's Operating Margin has been stable in the last couple of years.
DPZ's Gross Margin of 39.61% is on the low side compared to the rest of the industry. DPZ is outperformed by 62.60% of its industry peers.
DPZ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.9% | ||
| PM (TTM) | 12.49% | ||
| GM | 39.61% |
OM growth 3Y1.41%
OM growth 5Y1.44%
PM growth 3Y1.95%
PM growth 5Y2.31%
GM growth 3Y0.46%
GM growth 5Y0.27%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), DPZ is creating value.
Compared to 1 year ago, DPZ has less shares outstanding
Compared to 5 years ago, DPZ has less shares outstanding
DPZ has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.41 indicates that DPZ is not a great score, but indicates only limited risk for bankruptcy at the moment.
DPZ's Altman-Z score of 2.41 is fine compared to the rest of the industry. DPZ outperforms 61.83% of its industry peers.
DPZ has a debt to FCF ratio of 8.11. This is a slightly negative value and a sign of low solvency as DPZ would need 8.11 years to pay back of all of its debts.
DPZ's Debt to FCF ratio of 8.11 is fine compared to the rest of the industry. DPZ outperforms 67.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 8.11 | ||
| Altman-Z | 2.41 |
ROIC/WACC70.7
WACC8.33%
2.3 Liquidity
DPZ has a Current Ratio of 0.60. This is a bad value and indicates that DPZ is not financially healthy enough and could expect problems in meeting its short term obligations.
DPZ has a Current ratio of 0.60. This is in the lower half of the industry: DPZ underperforms 70.99% of its industry peers.
A Quick Ratio of 0.56 indicates that DPZ may have some problems paying its short term obligations.
The Quick ratio of DPZ (0.56) is worse than 68.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
DPZ shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.84%.
The Earnings Per Share has been growing by 11.77% on average over the past years. This is quite good.
The Revenue has been growing slightly by 3.65% in the past year.
DPZ shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.40% yearly.
EPS 1Y (TTM)5.84%
EPS 3Y7.04%
EPS 5Y11.77%
EPS Q2Q%-5.46%
Revenue 1Y (TTM)3.65%
Revenue growth 3Y2.6%
Revenue growth 5Y5.4%
Sales Q2Q%4.32%
3.2 Future
Based on estimates for the next years, DPZ will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.37% on average per year.
DPZ is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.42% yearly.
EPS Next Y7.25%
EPS Next 2Y8.13%
EPS Next 3Y8.4%
EPS Next 5Y8.37%
Revenue Next Year4.07%
Revenue Next 2Y5.28%
Revenue Next 3Y5.08%
Revenue Next 5Y5.42%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 27.07, which means the current valuation is very expensive for DPZ.
The rest of the industry has a similar Price/Earnings ratio as DPZ.
When comparing the Price/Earnings ratio of DPZ to the average of the S&P500 Index (26.82), we can say DPZ is valued inline with the index average.
A Price/Forward Earnings ratio of 23.89 indicates a rather expensive valuation of DPZ.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DPZ is on the same level as its industry peers.
DPZ's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.21.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.07 | ||
| Fwd PE | 23.89 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DPZ is valued a bit more expensive than the industry average as 69.47% of the companies are valued more cheaply.
DPZ's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DPZ is cheaper than 67.18% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.81 | ||
| EV/EBITDA | 20.59 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DPZ does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of DPZ may justify a higher PE ratio.
PEG (NY)3.74
PEG (5Y)2.3
EPS Next 2Y8.13%
EPS Next 3Y8.4%
5. Dividend
5.1 Amount
DPZ has a Yearly Dividend Yield of 1.50%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.76, DPZ pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.39, DPZ is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
5.2 History
On average, the dividend of DPZ grows each year by 32.15%, which is quite nice.
DPZ has paid a dividend for at least 10 years, which is a reliable track record.
DPZ has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)32.15%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
36.36% of the earnings are spent on dividend by DPZ. This is a low number and sustainable payout ratio.
DPZ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP36.36%
EPS Next 2Y8.13%
EPS Next 3Y8.4%
466.17
+2.96 (+0.64%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners93.29%
Inst Owner Change-0.33%
Ins Owners0.41%
Ins Owner Change-0.77%
Market Cap15.83B
Analysts76.32
Price Target520.56 (11.67%)
Short Float %6.12%
Short Ratio3.07
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.5% |
Yearly Dividend6.09
Dividend Growth(5Y)32.15%
DP36.36%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.31%
Min EPS beat(2)-4.59%
Max EPS beat(2)5.22%
EPS beat(4)2
Avg EPS beat(4)3.28%
Min EPS beat(4)-4.59%
Max EPS beat(4)13.76%
EPS beat(8)6
Avg EPS beat(8)6.58%
EPS beat(12)7
Avg EPS beat(12)4.29%
EPS beat(16)8
Avg EPS beat(16)1.87%
Revenue beat(2)0
Avg Revenue beat(2)-1.65%
Min Revenue beat(2)-2.28%
Max Revenue beat(2)-1.02%
Revenue beat(4)0
Avg Revenue beat(4)-2.29%
Min Revenue beat(4)-3.16%
Max Revenue beat(4)-1.02%
Revenue beat(8)0
Avg Revenue beat(8)-2.08%
Revenue beat(12)0
Avg Revenue beat(12)-2.4%
Revenue beat(16)1
Avg Revenue beat(16)-2.47%
PT rev (1m)0.46%
PT rev (3m)2.74%
EPS NQ rev (1m)1.11%
EPS NQ rev (3m)0.46%
EPS NY rev (1m)-0.18%
EPS NY rev (3m)1.62%
Revenue NQ rev (1m)-0.17%
Revenue NQ rev (3m)-0.43%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.07 | ||
| Fwd PE | 23.89 | ||
| P/S | 3.31 | ||
| P/FCF | 25.81 | ||
| P/OCF | 22.05 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.59 |
EPS(TTM)17.22
EY3.69%
EPS(NY)19.51
Fwd EY4.19%
FCF(TTM)18.06
FCFY3.87%
OCF(TTM)21.14
OCFY4.53%
SpS140.83
BVpS-117.07
TBVpS-122.05
PEG (NY)3.74
PEG (5Y)2.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 32.97% | ||
| ROE | N/A | ||
| ROCE | 734.08% | ||
| ROIC | 588.92% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 18.9% | ||
| PM (TTM) | 12.49% | ||
| GM | 39.61% | ||
| FCFM | 12.82% |
ROA(3y)30.95%
ROA(5y)30.95%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)227.47%
ROIC(5y)158.69%
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)283.54%
ROCE(5y)197.8%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y1.41%
OM growth 5Y1.44%
PM growth 3Y1.95%
PM growth 5Y2.31%
GM growth 3Y0.46%
GM growth 5Y0.27%
F-Score8
Asset Turnover2.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 8.11 | ||
| Debt/EBITDA | 3.86 | ||
| Cap/Depr | 118.37% | ||
| Cap/Sales | 2.18% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.34% | ||
| Profit Quality | 102.69% | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | 2.41 |
F-Score8
WACC8.33%
ROIC/WACC70.7
Cap/Depr(3y)122.69%
Cap/Depr(5y)126.74%
Cap/Sales(3y)2.22%
Cap/Sales(5y)2.2%
Profit Quality(3y)88.99%
Profit Quality(5y)95.86%
High Growth Momentum
Growth
EPS 1Y (TTM)5.84%
EPS 3Y7.04%
EPS 5Y11.77%
EPS Q2Q%-5.46%
EPS Next Y7.25%
EPS Next 2Y8.13%
EPS Next 3Y8.4%
EPS Next 5Y8.37%
Revenue 1Y (TTM)3.65%
Revenue growth 3Y2.6%
Revenue growth 5Y5.4%
Sales Q2Q%4.32%
Revenue Next Year4.07%
Revenue Next 2Y5.28%
Revenue Next 3Y5.08%
Revenue Next 5Y5.42%
EBIT growth 1Y5.91%
EBIT growth 3Y4.05%
EBIT growth 5Y6.91%
EBIT Next Year17.04%
EBIT Next 3Y10.4%
EBIT Next 5Y8.25%
FCF growth 1Y30.01%
FCF growth 3Y-2.94%
FCF growth 5Y4.47%
OCF growth 1Y27.19%
OCF growth 3Y-1.52%
OCF growth 5Y4.69%