June 25, 2025 a 02:46 am
DPZ: Dividend Analysis - Domino's Pizza, Inc.
Domino's Pizza, Inc., known for its consistent business model and global presence, continues to attract dividend investors with its current dividend policies. With a history of 18 years of consistent dividend payments and a healthy dividend yield of 1.44%, the stock demonstrates a stable commitment to returning capital to shareholders. The lack of recent dividend cuts further indicates management's confidence in maintaining distributions even amid challenging market conditions. As the company continues to expand its footprint, it provides both income and growth opportunities for long-term investors.
📊 Overview
Domino's Pizza operates in the Consumer Discretionary sector, maintaining a moderate dividend yield and a strong history of dividend continuity. The details below encapsulate the essential metrics for potential investors seeking stability and income.
| Metric | Value |
|---|---|
| Sector | Consumer Discretionary |
| Dividend Yield | 1.44% |
| Current Dividend per Share | 6.05 USD |
| Dividend History | 18 years |
| Last Cut or Suspension | None |
📈 Dividend History
The dividend history of Domino's Pizza highlights its 18-year legacy of consistent payouts, crucial for income investors seeking reliability. This track record demonstrates the company's ability to maintain and potentially grow dividend distributions over time.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 3.48 |
| 2024 | 6.04 |
| 2023 | 4.84 |
| 2022 | 4.40 |
| 2021 | 3.76 |
📈 Dividend Growth
Evaluating dividend growth is essential for assessing the potential for increasing dividend income. Domino's Pizza's growth rates are cautiously optimistic yet reassuring.
| Time Period | Growth |
|---|---|
| 3 years | 17.12% |
| 5 years | 18.36% |
The average dividend growth is 18.36% over 5 years. This indicates a moderate but steady dividend increase, enhancing long-term shareholder value.
⚖️ Payout Ratio
The payout ratio provides insights into the sustainability of dividends. Domino's Pizza maintains diversified payout metrics, balancing earnings with distributable cash flows.
| Key Figure | Ratio |
|---|---|
| EPS-based | 34.46% |
| Free cash flow-based | 36.12% |
The EPS payout ratio of 34.46% and FCF payout ratio of 36.12% suggest a conservative dividend policy, providing room for growth and reinvestment.
💰 Cashflow & Capital Efficiency
Cashflow stability is pivotal for long-term dividend payments. Understanding the capital efficiency components aids in evaluating the company's fineness in managing operational funds and capital investments.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 3.14% | 3.36% | 3.50% |
| Earnings Yield | 3.65% | 3.59% | 3.99% |
| CAPEX to Operating Cash Flow | 15.79% | 17.84% | 18.06% |
| Stock-based Compensation to Revenue | 0.63% | 0.84% | 0.91% |
| Free Cash Flow / Operating Cash Flow Ratio | 81.65% | 82.16% | 81.94% |
Domino's sustain a stable yield with a strong free cash flow to operating cash flow ratio, reflecting solid financial health and capital allocation efficiency.
📈 Balance Sheet & Leverage Analysis
Analyzing leverage ratios is essential to gauge Domino's financial flexibility and its capacity to manage debt obligations effectively.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | -1.25 | -1.28 | -1.31 |
| Debt-to-Assets | 3.28 | 3.11 | 2.99 |
| Debt-to-Capital | 4.94 | 4.57 | 4.21 |
| Net Debt to EBITDA | 6.10 | 5.48 | 4.98 |
| Current Ratio | 1.47 | 1.49 | 0.60 |
| Quick Ratio | 1.32 | 1.34 | 0.52 |
The reduction in debt indicates Domino's strategy to deleverage and improve liquidity, though negative equity suggests caution is necessary.
📈 Fundamental Strength & Profitability
This section elucidates Domino's capability to generate profitable returns and their implications for the business's core financial health.
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | -10.80% | -12.75% | -14.74% |
| Return on Assets | 28.23% | 30.99% | 33.63% |
| Return on Invested Capital | 52.48% | 53.31% | 54.10% |
| Net Margin | 9.97% | 11.59% | 12.41% |
| Gross Margin | 36.34% | 38.56% | 39.28% |
| R&D to Revenue | 0.00% | 0.00% | 0.00% |
Despite a negative ROE, Domino's high ROIC reflects proficient capital use, signifying robust core operations' profitability.
📉 Price Development
💯 Dividend Scoring System
| Category | Score | Visual |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 4 | |
| Dividend Growth | 3 | |
| Payout Ratio | 4 | |
| Financial Stability | 2 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 2 |
Total Score: 27/40
✅ Rating
Domino's Pizza offers a reasonable dividend yield with substantial continuity, making it an attractive option for dividend investors prioritizing stability over high growth. While the company's leverage ratios require monitoring, its strong cash flow coverage and consistent ROIC affirm its capacity to support dividend payments. Investors seeking a balanced approach to income and growth may find Domino's a viable addition to their portfolios.