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 136 industry peers in the Hotels, Restaurants & Leisure industry. While DPZ has a great profitability rating, 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
DPZ had positive earnings in the past year.
DPZ had a positive operating cash flow in the past year.
DPZ had positive earnings in each of the past 5 years.
In the past 5 years DPZ always reported a positive cash flow from operatings.
1.2 Ratios
DPZ has a better Return On Assets (33.63%) than 99.26% of its industry peers.
The Return On Invested Capital of DPZ (566.28%) is better than 100.00% of its industry peers.
DPZ had an Average Return On Invested Capital over the past 3 years of 227.47%. This is significantly above the industry average of 15.70%.
The 3 year average ROIC (227.47%) for DPZ is below the current ROIC(566.28%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 33.63% | ||
| ROE | N/A | ||
| ROIC | 566.28% |
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 Profit Margin of 12.41%. This is in the better half of the industry: DPZ outperforms 79.41% of its industry peers.
In the last couple of years the Profit Margin of DPZ has grown nicely.
Looking at the Operating Margin, with a value of 18.68%, DPZ is in the better half of the industry, outperforming 75.74% of the companies in the same industry.
In the last couple of years the Operating Margin of DPZ has remained more or less at the same level.
With a Gross Margin value of 39.28%, DPZ is not doing good in the industry: 62.50% of the companies in the same industry are doing better.
DPZ's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 18.68% | ||
| PM (TTM) | 12.41% | ||
| GM | 39.28% |
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.
DPZ has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, DPZ has less shares outstanding
The debt/assets ratio for DPZ has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.39 indicates that DPZ is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a decent Altman-Z score value of 2.39, DPZ is doing good in the industry, outperforming 71.32% of the companies in the same industry.
The Debt to FCF ratio of DPZ is 9.72, which is on the high side as it means it would take DPZ, 9.72 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 9.72, DPZ is doing good in the industry, outperforming 61.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 9.72 | ||
| Altman-Z | 2.39 |
ROIC/WACC68.23
WACC8.3%
2.3 Liquidity
A Current Ratio of 0.56 indicates that DPZ may have some problems paying its short term obligations.
With a Current ratio value of 0.56, DPZ is not doing good in the industry: 69.85% of the companies in the same industry are doing better.
A Quick Ratio of 0.52 indicates that DPZ may have some problems paying its short term obligations.
DPZ's Quick ratio of 0.52 is on the low side compared to the rest of the industry. DPZ is outperformed by 70.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.77% over the past year.
DPZ shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.77% yearly.
DPZ shows a small growth in Revenue. In the last year, the Revenue has grown by 5.07%.
Measured over the past years, DPZ shows a small growth in Revenue. The Revenue has been growing by 5.40% on average per year.
EPS 1Y (TTM)13.77%
EPS 3Y7.04%
EPS 5Y11.77%
EPS Q2Q%9.15%
Revenue 1Y (TTM)5.07%
Revenue growth 3Y2.6%
Revenue growth 5Y5.4%
Sales Q2Q%2.92%
3.2 Future
The Earnings Per Share is expected to grow by 8.50% on average over the next years. This is quite good.
Based on estimates for the next years, DPZ will show a small growth in Revenue. The Revenue will grow by 5.67% on average per year.
EPS Next Y5.38%
EPS Next 2Y8.18%
EPS Next 3Y9.06%
EPS Next 5Y8.5%
Revenue Next Year4.57%
Revenue Next 2Y5.58%
Revenue Next 3Y5.58%
Revenue Next 5Y5.67%
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 27.97, which means the current valuation is very expensive for DPZ.
DPZ's Price/Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.29, DPZ is valued at the same level.
A Price/Forward Earnings ratio of 26.54 indicates a quite expensive valuation of DPZ.
The rest of the industry has a similar Price/Forward Earnings ratio as DPZ.
When comparing the Price/Forward Earnings ratio of DPZ to the average of the S&P500 Index (21.08), we can say DPZ is valued slightly more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.97 | ||
| Fwd PE | 26.54 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DPZ is valued a bit more expensive than the industry average as 69.85% of the companies are valued more cheaply.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DPZ is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.27 | ||
| EV/EBITDA | 21.43 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DPZ has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.2
PEG (5Y)2.38
EPS Next 2Y8.18%
EPS Next 3Y9.06%
5. Dividend
5.1 Amount
DPZ has a Yearly Dividend Yield of 1.54%. Purely for dividend investing, there may be better candidates out there.
DPZ's Dividend Yield is a higher than the industry average which is at 3.96.
Compared to an average S&P500 Dividend Yield of 2.57, DPZ's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
5.2 History
The dividend of DPZ is nicely growing with an annual growth rate of 32.15%!
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
DPZ pays out 35.94% of its income as dividend. This is a sustainable payout ratio.
DPZ's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.94%
EPS Next 2Y8.18%
EPS Next 3Y9.06%
466.74
+4.49 (+0.97%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryHotels, Restaurants & Leisure
Earnings (Last)
Earnings (Next)
Inst Owners95.21%
Inst Owner Change0%
Ins Owners0.4%
Ins Owner Change-5.25%
Market Cap16.01B
Analysts78.42
Price Target502.7 (7.7%)
Short Float %5.81%
Short Ratio2.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
Yearly Dividend6.08
Dividend Growth(5Y)32.15%
DP35.94%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.25%
Min EPS beat(2)-1.25%
Max EPS beat(2)13.76%
EPS beat(4)3
Avg EPS beat(4)6.33%
Min EPS beat(4)-1.25%
Max EPS beat(4)13.76%
EPS beat(8)6
Avg EPS beat(8)7.27%
EPS beat(12)6
Avg EPS beat(12)2.33%
EPS beat(16)9
Avg EPS beat(16)2.37%
Revenue beat(2)0
Avg Revenue beat(2)-2.92%
Min Revenue beat(2)-3.16%
Max Revenue beat(2)-2.69%
Revenue beat(4)0
Avg Revenue beat(4)-1.95%
Min Revenue beat(4)-3.16%
Max Revenue beat(4)-0.49%
Revenue beat(8)0
Avg Revenue beat(8)-2.6%
Revenue beat(12)1
Avg Revenue beat(12)-2.3%
Revenue beat(16)2
Avg Revenue beat(16)-2.01%
PT rev (1m)0.32%
PT rev (3m)2.02%
EPS NQ rev (1m)1.01%
EPS NQ rev (3m)-0.01%
EPS NY rev (1m)-0.49%
EPS NY rev (3m)-1.27%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)-1.56%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.97 | ||
| Fwd PE | 26.54 | ||
| P/S | 3.4 | ||
| P/FCF | 31.27 | ||
| P/OCF | 25.62 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 21.43 |
EPS(TTM)16.69
EY3.58%
EPS(NY)17.59
Fwd EY3.77%
FCF(TTM)14.93
FCFY3.2%
OCF(TTM)18.22
OCFY3.9%
SpS137.21
BVpS-115.52
TBVpS-120.38
PEG (NY)5.2
PEG (5Y)2.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 33.63% | ||
| ROE | N/A | ||
| ROCE | 705.86% | ||
| ROIC | 566.28% | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 18.68% | ||
| PM (TTM) | 12.41% | ||
| GM | 39.28% | ||
| FCFM | 10.88% |
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 Turnover2.71
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 9.72 | ||
| Debt/EBITDA | 3.96 | ||
| Cap/Depr | 128.67% | ||
| Cap/Sales | 2.4% | ||
| Interest Coverage | 4.75 | ||
| Cash Conversion | 64.63% | ||
| Profit Quality | 87.65% | ||
| Current Ratio | 0.56 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 2.39 |
F-Score8
WACC8.3%
ROIC/WACC68.23
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)13.77%
EPS 3Y7.04%
EPS 5Y11.77%
EPS Q2Q%9.15%
EPS Next Y5.38%
EPS Next 2Y8.18%
EPS Next 3Y9.06%
EPS Next 5Y8.5%
Revenue 1Y (TTM)5.07%
Revenue growth 3Y2.6%
Revenue growth 5Y5.4%
Sales Q2Q%2.92%
Revenue Next Year4.57%
Revenue Next 2Y5.58%
Revenue Next 3Y5.58%
Revenue Next 5Y5.67%
EBIT growth 1Y7.26%
EBIT growth 3Y4.05%
EBIT growth 5Y6.91%
EBIT Next Year17.38%
EBIT Next 3Y10.31%
EBIT Next 5Y8.48%
FCF growth 1Y5.47%
FCF growth 3Y-2.94%
FCF growth 5Y4.47%
OCF growth 1Y5.76%
OCF growth 3Y-1.52%
OCF growth 5Y4.69%