What to Know Before Buying Domino's Stock

• Domino's operates a franchise concern and generates astir of its gross from franchise fees and associated products.

• It's the largest pizza concatenation successful the world, but it's opening stores astatine a steadfast pace.

• Domino's pays a increasing dividend.

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Domino's Pizza (NASDAQ: DPZ) is the largest pizza concatenation successful the world, and it precocious achieved the presumption of being a Warren Buffett stock. If you're besides considering adding it to your portfolio, here's what you request to know.

Domino's has 21,700 stores successful 90 planetary markets, making it the person successful pizza stores. Pizza is simply a resilient category, since it's inexpensive to bargain and speedy to order. As a concern model, it's casual to acceptable up pizza stores, which person a reasonably tiny paper with minimal ingredients and enactment for astir developed markets.

99% of Domino's planetary store fleet is franchised, truthful Domino's makes the immense bulk of its income from franchise fees and not from selling pizza. Despite its ample size, Domino's opens much stores frequently, with 214 caller stores successful the 2025 fiscal 3rd 4th (ended Sept. 7). Most of those were international.

Unlike galore fast-casual chains that are struggling successful the high-inflation environment, Domino's continues to thrive. It provides quarterly updates for planetary retail income and comparable income (comps), which measurement however overmuch nutrient is being sold, arsenic good arsenic institution sales, which is however overmuch wealth Domino's is making from selling each of that pizza.

In the 3rd quarter, planetary retail income accrued 6.3% twelvemonth implicit year, and U.S. comps were up 5.3%. Company income accrued 6.2%, and operating income was up 12.2%. Much of the summation was owed to higher pricing successful nutrient transportation orders from franchising partners and higher franchising fees.

The institution is performing overmuch amended successful the U.S., wherever comps were up 5.2%. International comps were up lone 1.7%, but full planetary income accrued 5.7%, lifted by the caller stores.

Domino's has underperformed the marketplace this twelvemonth and implicit caller periods. However, it has outperformed the marketplace implicit the past 10 years.

It pays a increasing dividend that yields 1.6% astatine the existent price. That's precocious for Domino's dividend, and that's successful enactment with its banal being astir level this year, since banal terms and dividend output determination conversely.

Buffett is apt funny successful Domino's arsenic a unchangeable marketplace person that volition ever person a spot successful the system and tin upwind marketplace storms. It's a coagulated and reliable stock, and it could beryllium a beardown anchor banal for a diversified portfolio.