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This Prominent Pizza Stock Is One of the Newest Additions to Warren Buffett's Portfolio. Time to Buy?

Company Overview - Berkshire Hathaway, led by Warren Buffett, has acquired nearly 1.28 million shares of Domino's Pizza, valued at approximately $557 million at the time of the purchase [3][4] - This investment does not position Domino's as one of Berkshire's largest holdings, representing less than 4% of the company's outstanding shares [4] Brand Recognition and Market Position - Domino's has a strong brand presence in the U.S., being synonymous with pizza delivery for over six decades [6] - Despite its brand strength, Domino's has underperformed in the stock market, with a year-to-date price gain of less than 6%, significantly lagging behind the S&P 500's nearly 25% increase [6][7] Financial Performance - In the third quarter, Domino's reported a nearly 4% year-over-year increase in total sales, with same-store sales in the U.S. growing by 3% [8] - The company has a quarterly dividend payout of $1.51, yielding 1.4%, which is slightly above the S&P 500 average of 1.2% [9] Growth Projections - Analysts project a 14% increase in per-share profitability for Domino's in 2024, followed by a 5% increase in 2025, with sales growth estimates at 6% for both years [10] - The forward price-to-earnings (P/E) ratio is at 24, and the five-year price/earnings-to-growth (PEG) ratio is slightly over 2.1, indicating moderate valuation metrics [11] Investment Considerations - While Domino's is considered well-managed, its growth potential may be limited due to the saturated pizza market [12] - The stock does not appear to be an attractive buy at its current valuation, especially when compared to competitors like McDonald's, which offers a higher dividend yield of 2.4% [12][13]