Domino's Pizza - >>> In much the same way Sherwin-Williams thrived amid the lockdown, Domino's Pizza would also be considered a pandemic darling of sorts. While not thriving to the same extent as Zoom, for example, Domino's reported double-digit sales growth for five straight quarters at the end of 2020 and into 2021.
Thanks to its robust carryout operations and ability to implement a contact-free pickup option during the pandemic, Domino's succeeded despite the challenging environment. This success sent its stock skyward, only to tumble over 36% since its all-time highs.
Facing tough comparables from the previous year, Domino's growth stalled as pandemic restrictions eased and its customers were hungry for more authentic dining experiences. Further held back by inflation spurring higher ingredient costs and issues finding labor for its stores, the company recorded three straight quarters of declining earnings per share (EPS) to start 2022.
So what on Earth makes Domino's Pizza an all-weather stock to buy right now?
First, if we move out on the timeline regarding this declining EPS, we can see that it looks like nothing more than a dip in the larger scope of things.
Similarly, its incredible ROIC remains among the highest in the S&P 500 index, despite lowering recently.
On top of this, despite its customers being price conscious, Domino's didn't experience a sales drop despite raising prices by roughly 5% year over year in the third quarter. In fact, carryout sales grew 20% in Q3, and the company is now the largest carryout pizza brand in the U.S.
Additionally, the company lowered its share count by 37% over the last decade, while its dividend payments jumped 450% over the same time frame. Despite this tremendous increase, its 1.2% dividend only uses 34% of the company's net income, leaving a solid dividend growth runway.
Domino's trades at 29 times earnings, slightly below its 10-year average of 34. Recording three consecutive quarters of sales growth despite implementing gradual price increases, Domino's makes for an excellent shareholder returns-focused company to add at a discount.
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