So far in 2020 a number of industries and companies have emerged as clear winners. One of these is fast food restaurants, such as pizza chains, as diners, sheltering on site, have sought food delivery rather than eating out.
Today we will take a closer look at the UK-based Domino & # 39; s Pizza Group (LON :), (OTC 🙂 a master franchise arm of the US headquarters, Domino & # 39; s Pizza (NYSE 🙂 to determine if they can be purchased long-term at the current level
FTSE 250 DOM shares with members
DOM is the UK's leading pizza brand and an important name in the Irish market. It also owns the main franchise agreement for Switzerland and Liechtenstein and has offices in Germany, Iceland, Luxembourg, Norway and Sweden.
The first Domino & # 39; s Pizza in the UK opened in 1985. Prior to 1993, when UK-based owners bought the franchise, the group was controlled from the US. In 1999, Alternative Investment Market (AIM) launched the company, which was followed by a move to the main market in 2008.
Domino & # 39; s Pizza Group 18-month chart.
On August 11, Domino & # 39; s released interim for the 26-week period ending June 28. System sales in the UK and Ireland, which represents the sum of all sales from both franchise and corporate stores, were up 5.5% to £ 628.9 million (or $ 826 million).
Management pointed to the jump in online orders in the second quarter. Analysts were pleased to see that the company decided to pay out the deferred 2019 final dividend
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CEO Dominic Paul, the former boss of Costa Coffee – owned by Coca-Cola Company (NYSE 🙂 – who joined Domino & # 39; s in May created a mixed picture for the remainder of the year. He said:
"While trade was encouraging in the first few weeks of the second half, it is too early to conclude how consumer behavior will evolve."
The shareholders of the FTSE 250 member have been well rewarded. Year-to-date, DOM stock is up more than 7%. It had a 52-week low in March and a 52-week high in June. Shares have returned more than 40% since early spring. Forward P / E and P / S ratio are at 20.41 and 3.07 respectively.
Shares are floating at 330p (US, OTC shares closed just below $ 9 yesterday). In the case of short term profit taking of about 5% -7%, they would provide better value for long term investors.
Domino & # 39; s Pizza in the US
Domino & # 39; s Pizza, the world's largest pizza company based on worldwide retail sales, headquartered in Ann Arbor , Michigan, is one of the largest food chains to capitalize on customer cravings in 2020.
The first Domino & # 39; s store opened in 1960 in Ypsilanti, Michigan. As the US business expanded, the first international outlet in Canada began in 1982, opening in Winnipeg, Manitoba.
There are currently more than 17,100 stores, including more than 10,000 outside the United States. The chain has approximately 770 independent franchise owners in the United States, with more than 94% of Domino's stores in US state franchise ownership.
Domino & # 39; s Pizza USA 18 Month Review
On July 16, the group announced. Global retail sales, positively impacted by same-store sales in the US, were up 5.7%. Same-store sales in the United States and abroad were up 16.1% and 1.3% respectively, compared to the same period last year.
Domino & # 39; s had global retail sales of more than $ 14.3 billion in 2019, with more than $ 7.0 billion in the US and nearly $ 7.3 billion internationally. This year, in the second quarter, it had global retail sales of more than $ 3.4 billion, with more than $ 1.9 billion in the US and more than $ 1.5 billion internationally.
The companies generated $ 240 million in net revenues for the first half of the year, an increase of 30% from 2019. In the US, Domino & # 39; s generates more than 65% of its sales digitally through the AnyWare suite of digital ordering technology. The Street sees its digital ordering and delivery infrastructure as an important asset.
During the quarter, Domino & # 39; s acquired a minority stake in Dash Brands Ltd., a privately held company that is the main franchisee in China.
So far in the year, DPZ's stock has increased by more than 42%. On August 24, it hit a record high of $ 424.72. Long-term shareholders have been pleased with the growth since 2009, when shares were around $ 9. Put another way, $ 1,000 invested in DPZ would now be around $ 47,000.
Forward P / E and P / S ratios are 36.90 and 4.73, respectively. Finally, on July 15, the board announced a quarterly dividend of 78 cents per share to shareholders with a record on September 15.
Bottom Line
Market participants who want to get some of the investment pie can consider purchasing the dips from Domino & # 39; s Pizza, either in the UK or The U.S. Both companies may be well positioned to meet the increased consumer hunger for comfort during the stay-at-home days of COVID-19, as it will likely take longer for personalized dining in restaurants to make a full comeback. Meanwhile, Domino's in the US and worldwide are likely to see more sales.
Australian investors may also want to further investigate Australia-based Domino & # 39; s Pizza Enterprises Ltd (ASX :).
Finally, several exchange-traded funds (ETFs) target a range of restaurants and food-related businesses. These include:
First Trust Nasdaq Food & Beverage ETF (NASDAQ 🙂
Invesco Dynamic Food & Beverage ETF (NYSE 🙂
Invesco Dynamic Leisure and Entertainment ETF (NYSE 🙂
iShares MSCI Global Agriculture Producers ETF (NYSE 🙂
iShares Global Consumer Staples ETF (NYSE :), which was covered.
