How Does Domino’s Pizza Compare to Its Peers?
US Equity Market Update for October 8, 2015
Domino’s Pizza and its peers
An analysis of Domino’s income statement in 3Q15 follows:
The gross profit margins of Domino’s Pizza (DPZ), Yum! Brands (YUM), Chipotle Mexican Grill (CMG), Jack in the Box (JACK), and Papa John’s (PZZA) are 29.3%, 29.1%, 28%, 44.9%, and 38.7%, respectively.
The EPS (earnings per share) of Domino’s Pizza, Yum! Brands, Chipotle Mexican Grill, Jack in the Box, and Papa John’s are $0.67, $0.95, $4.45, $0.75, and $0.27, respectively.
An analysis of Domino’s balance sheet in 3Q15 follows:
The current ratios of Domino’s Pizza, Yum! Brands, Chipotle Mexican Grill, Jack in the Box, and Papa John’s are 1.4, 0.73, 3.8, 0.80, and 1.3, respectively.
An analysis of Domino’s valuation follows:
The PE (price-to-earnings) ratios of Domino’s Pizza, Yum! Brands, Chipotle Mexican Grill, Jack in the Box, and Papa John’s are 33.1x, 33.1x, 45x, 27.7x, and 39.3x, respectively.
The price-to-sales ratios of Domino’s Pizza, Yum! Brands, Chipotle Mexican Grill, Jack in the Box, and Papa John’s are 2.7x, 2.2x, 5.2x, 1.8x, and 1.6x, respectively.
According to the above findings, the peers outperformed Domino’s Pizza based on the EPS and PE ratio. However, Domino’s Pizza is way ahead of its peers based on the current ratio and price-to-sales ratio.
ETFs that invest in Domino’s Pizza
The PowerShares DWA Consumer Cyclicals Momentum Portfolio (PEZ) invests 3.4% of its holdings in Domino’s Pizza. PEZ tracks an index of US consumer cyclical firms selected and weighted by price momentum.
The PowerShares DWA Momentum ETF (PDP) invests 2.3% of its holdings in Domino’s Pizza. PDP tracks an index of 100 US-listed large and mid-cap companies selected and weighted by the relative stock performance.
The First Trust Mid Cap Growth AlphaDex ETF (FNY) invests 1.5% of its holdings in Domino’s Pizza. FNY tracks a tiered and equal-weighted index of mid-cap growth stocks selected by S&P’s AlphaDex selection methodology from the S&P 400 Index.
Comparing Domino’s Pizza and its ETFs
An analysis of Domino’s price movement follows:
The YTD (year-to-date) price movements of Domino’s Pizza, PEZ, PDP, and FNY are 10%, 3.8%, -0.08%, and -1.3%, respectively.
An analysis of Domino’s valuation follows:
The PE ratios of Domino’s Pizza, PEZ, PDP, and FNY are 33.1x, 19.7x, 22.7x, and 27.7x, respectively.
Domino’s Pizza outperformed its ETFs based on the price movement and PE ratio.
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