Picture supply: Domino’s Pizza Group plc
On Saturday, April 4th, I emphasised: FTSE250 inventory domino pizza (LSE: DOM) is a lovely UK dividend play. It appeared low-cost on the time, so I mentioned it was price a more in-depth look.
In hindsight, this was definitely price a more in-depth look. If somebody had purchased £5,000 price of shares on Tuesday 7 April, when the inventory market opened after the Easter holidays, that funding would now be price round £5,800. It is a nice end in simply over two weeks.
Strongest development in 11 quarters
Is the inventory nonetheless price contemplating at present ranges? I believe so.
Right now (April 23), the corporate introduced its first quarter buying and selling replace. And though it was for a short while, it was very encouraging.
Whole system income for the quarter elevated 5.8%, with underlying development of 4.5% (the best development in 11 quarters). In the meantime, complete orders elevated by 2.3% and like-for-like orders elevated by 0.9%.
Concerning price administration, the corporate mentioned that prices for the present 12 months are hedged till 2027 and a few prices are hedged till 2027. That is clearly a plus.
Concerning the outlook, the group mentioned it presently expects to attain its full-year income forecast. We do not know precisely what these expectations are, however the market is presently in search of a revenue of 18p per share.
We carried the constructive momentum seen on the finish of 2025 into 2026, with the transaction performing in step with our expectations.
Domino’s Pizza CEO Nicola Frampton
scrumptious new merchandise
On the product facet, it’s noteworthy that the corporate introduced the profitable launch of CHICK ‘N’ DIP through the quarter. Early buying and selling efficiency right here met expectations with constructive suggestions from clients.
The corporate additionally mentioned it just lately launched its “Italianos” pizza sequence, which relies on its thin-crust pizza assortment. I believe this may very well be a winner for the corporate. Right now’s shoppers usually need any such pizza.
So total, efficiency seems stable. Nevertheless, there are not any indicators of a big slowdown in GLP-1 weight reduction medication, and this can be a future threat.
How do you charge it?
When it comes to valuation, the inventory nonetheless seems low-cost. Evaluating the anticipated earnings of 18p per share to the present share worth of 201p, the ahead worth/earnings ratio (P/E) is simply 11 instances.
I believe it is good worth. Particularly contemplating the corporate’s robust model and excessive return on capital.
What in regards to the dividend yield?
Regardless of the latest share worth rise, the dividend yield stays very engaging. Analysts count on a dividend of 11.1p per share in 2026, giving the corporate a yield of round 5.5%.
It’s price stating that the dividend protection (ratio of earnings per share to dividend per share) is stable at roughly 1.6 instances. This is among the causes I picked up this inventory just a few weeks in the past. This inventory has significantly better dividend protection than many different high-yield UK shares.
Placing all this collectively, there’s quite a bit to love about Domino’s Pizza from an funding perspective. I believe this inventory is price additional analysis.