LSE:DOM

Stock Analysis Report

Executive Summary

Domino's Pizza Group plc owns, operates, and franchises Domino’s Pizza stores in the United Kingdom, the Republic of Ireland, Switzerland, Germany, Iceland, Norway, and Sweden.

Rewards

Earnings are forecast to grow 13.5% per year

Pays a reliable dividend of 3.13%

Risk Analysis

Has a high level of debt

Dividend of 3.13% is not well covered by earnings

Large one-off items impacting financial results

Profit margins (7.1%) are lower than last year (11.8%)



Snowflake Analysis

Reasonable growth potential average dividend payer.


Similar Companies

Share Price & News

How has Domino's Pizza Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DOM has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.1%

DOM

-0.2%

GB Hospitality

1.4%

GB Market


1 Year Return

9.1%

DOM

19.1%

GB Hospitality

12.4%

GB Market

Return vs Industry: DOM underperformed the UK Hospitality industry which returned 20.2% over the past year.

Return vs Market: DOM underperformed the UK Market which returned 12.7% over the past year.


Shareholder returns

DOMIndustryMarket
7 Day0.1%-0.2%1.4%
30 Day-5.2%1.0%1.8%
90 Day8.3%3.1%8.8%
1 Year13.7%9.1%22.6%19.1%18.3%12.4%
3 Year-10.4%-18.9%34.9%21.3%23.8%8.0%
5 Year57.9%36.8%53.1%29.2%41.8%8.9%

Price Volatility Vs. Market

How volatile is Domino's Pizza Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Domino's Pizza Group undervalued compared to its fair value and its price relative to the market?

36.53x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DOM (£3.04) is trading above our estimate of fair value (£2.94)

Significantly Below Fair Value: DOM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DOM is poor value based on its PE Ratio (36.5x) compared to the Hospitality industry average (27.9x).

PE vs Market: DOM is poor value based on its PE Ratio (36.5x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: DOM is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: DOM has negative assets, so we can't compare its PB Ratio to the GB Hospitality industry average.


Next Steps

Future Growth

How is Domino's Pizza Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

13.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DOM's forecast earnings growth (13.5% per year) is above the savings rate (0.5%).

Earnings vs Market: DOM's earnings (13.5% per year) are forecast to grow faster than the UK market (11.7% per year).

High Growth Earnings: DOM's earnings are forecast to grow, but not significantly.

Revenue vs Market: DOM's revenue (5.7% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: DOM's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DOM's Return on Equity is forecast to be very high in 3 years time (149.7%).


Next Steps

Past Performance

How has Domino's Pizza Group performed over the past 5 years?

3.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DOM has a large one-off loss of £27.3M impacting its June 30 2019 financial results.

Growing Profit Margin: DOM's current net profit margins (7.1%) are lower than last year (11.8%).


Past Earnings Growth Analysis

Earnings Trend: DOM's earnings have grown by 3.2% per year over the past 5 years.

Accelerating Growth: DOM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DOM had negative earnings growth (-40%) over the past year, making it difficult to compare to the Hospitality industry average (4.9%).


Return on Equity

High ROE: DOM's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Domino's Pizza Group's financial position?


Financial Position Analysis

Short Term Liabilities: DOM has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: DOM has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: DOM has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: DOM's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: DOM's debt is well covered by operating cash flow (29.7%).

Interest Coverage: DOM's interest payments on its debt are well covered by EBIT (15.7x coverage).


Balance Sheet

Inventory Level: DOM has a high level of physical assets or inventory.

Debt Coverage by Assets: DOM has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is Domino's Pizza Group's current dividend yield, its reliability and sustainability?

3.13%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.8%markettop25%5.0%industryaverage2.5%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: DOM's dividend (3.13%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: DOM's dividend (3.13%) is low compared to the top 25% of dividend payers in the UK market (4.95%).


Stability and Growth of Payments

Stable Dividend: DOM's dividends per share have been stable in the past 10 years.

Growing Dividend: DOM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (116.1%), DOM's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DOM's dividends in 3 years are forecast to be covered by earnings (63.3% payout ratio).


Next Steps

Management

What is the CEO of Domino's Pizza Group's salary, the management and board of directors tenure and is there insider trading?

2.7yrs

Average management tenure


CEO

David Wild (64yo)

5.8yrs

Tenure

UK£699,000

Compensation

Mr. David James Wild has been Chief Executive Officer and Executive Director at Domino's Pizza Group plc since April 30, 2014 and November 14, 2013 respectively. Mr. Wild served as President of Wal-Mart Ge ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD907.78K) is below average for companies of similar size in the UK market ($USD1.85M).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.7yrs

Average Tenure

Experienced Management: DOM's management team is considered experienced (2.7 years average tenure).


Board Age and Tenure

5.7yrs

Average Tenure

58yo

Average Age

Experienced Board: DOM's board of directors are considered experienced (5.7 years average tenure).


Insider Trading

Insider Buying: DOM insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£574,05130 Dec 19
Browning West LP
EntityCompany
Shares180,567
Max PriceUK£3.18
BuyUK£31,16916 Dec 19
Ian Bull
EntityIndividual
Role
Chairman of the Board
Interim Chairman & Senior Independent Director
Shares10,000
Max PriceUK£3.12
BuyUK£3,974,37715 Nov 19
Browning West LP
EntityCompany
Shares1,429,242
Max PriceUK£2.80
BuyUK£7,732,58715 Nov 19
Browning West LP
EntityCompany
Shares2,826,446
Max PriceUK£2.79
BuyUK£27,89017 Oct 19
Ian Bull
EntityIndividual
Role
Chairman of the Board
Interim Chairman & Senior Independent Director
Shares10,000
Max PriceUK£2.79

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • David Wild (64yo)

    CEO & Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£699.00k
  • Simon Wallis (47yo)

    International Managing Director

    • Tenure: 1.3yrs
  • Barry Wiech

    Chief Information Officer

    • Tenure: 2.7yrs
  • Scott Bush

    Operations Director

    • Tenure: 1.3yrs
  • Emily Somers

    Chief Marketing Officer

    • Tenure: 0.4yrs
  • Brian Trier

    Group Managing Director of Germany

    • Tenure: 6.4yrs
  • Nina Arnott

    Head of Communications

    • Nadine Wyncoll

      People Director

      • Tenure: 3.6yrs
    • Simon D’Cruz

      Head of Financial Planning & Analysis

      • Bethany Barnes

        Head of Investor Relations


        Board Members

        • Colin Halpern (82yo)

          Non-Executive Vice Chairman

          • Tenure: 12.1yrs
          • Compensation: UK£171.00k
        • Helen Keays (54yo)

          Independent Non-Executive Director

          • Tenure: 8.3yrs
          • Compensation: UK£60.00k
        • David Wild (64yo)

          CEO & Executive Director

          • Tenure: 5.8yrs
          • Compensation: UK£699.00k
        • Ebbe Jacobsen (70yo)

          Non-Executive Director

          • Tenure: 6yrs
          • Compensation: UK£50.00k
        • Ian Bull (58yo)

          Interim Chairman & Senior Independent Director

          • Tenure: 0.08yrs
        • Kevin Higgins (56yo)

          Non-Executive Director

          • Tenure: 5.3yrs
          • Compensation: UK£60.00k
        • Usman Nabi (44yo)

          Non-Executive Director

          • Tenure: 0.2yrs
        • Elias Sese

          Independent Non-Executive Director

          • Tenure: 0.3yrs

        Company Information

        Domino's Pizza Group plc's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Domino's Pizza Group plc
        • Ticker: DOM
        • Exchange: LSE
        • Founded: 1960
        • Industry: Restaurants
        • Sector: Consumer Services
        • Market Cap: UK£1.397b
        • Shares outstanding: 460.10m
        • Website: https://corporate.dominos.co.uk

        Number of Employees


        Location

        • Domino's Pizza Group plc
        • 1 Thornbury
        • West Ashland
        • Milton Keynes
        • Buckinghamshire
        • MK6 4BB
        • United Kingdom

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        DMPZ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 1999
        DOMLSE (London Stock Exchange)YesOrdinary SharesGBGBPNov 1999
        DKOBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 1999
        DOMLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPNov 1999
        DPUK.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDAug 2011

        Biography

        Domino's Pizza Group plc owns, operates, and franchises Domino’s Pizza stores in the United Kingdom, the Republic of Ireland, Switzerland, Germany, Iceland, Norway, and Sweden. It also leases properties; and leases store equipment to franchisees. The company operates 1,261 stores in the six European markets. The company was formerly known as Domino's Pizza UK & IRL plc and changed its name to Domino's Pizza Group plc in May 2012. Domino's Pizza Group plc was founded in 1960 and is headquartered in Milton Keynes, the United Kingdom. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/19 20:57
        End of Day Share Price2020/01/17 00:00
        Earnings2019/06/30
        Annual Earnings2018/12/30


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.