Picture supply: Domino’s Pizza Group plc
On Saturday 4 April, I highlighted FTSE 250 inventory Domino’s Pizza (LSE: DOM) as a pretty UK dividend play. On the time, it was wanting low cost and I stated it was price a more in-depth look.
In hindsight, it was certainly price a more in-depth look, as had somebody purchased £5,000 price of shares on Tuesday, 7 April, when the inventory market opened after the Easter break, that funding would now be price about £5,800 – an important end in just a little over two weeks!
Must you purchase Domino’s Pizza Group plc shares as we speak?
Earlier than you determine, please take a second to evaluation this report first. Regardless of ongoing uncertainties from Trump’s tariffs to international conflicts, Mark Rogers and his staff imagine many UK shares nonetheless commerce at substantial reductions, providing savvy buyers loads of potential alternatives to study.
That is why this might be a really perfect time to safe this useful analysis – Mark’s analysts have scoured the markets to disclose 5 of his favorite long-term ‘Buys’. Please, do not make any large choices earlier than seeing them.
The strongest progress in 11 quarters
Is the inventory nonetheless price a take a look at present ranges? I believe so.
Earlier as we speak (23 April), the corporate posted a buying and selling replace for Q1. And whereas it was transient, it was very encouraging.
For the quarter, whole system gross sales elevated by 5.8%, with like‑for‑like progress of 4.5% (its strongest progress in 11 quarters). In the meantime, whole orders rose by 2.3%, with like‑for‑like orders up 0.9%.
When it comes to value administration, the corporate stated that its prices are hedged for the present monetary 12 months with some prices hedged into 2027. That’s clearly a constructive.
As for steerage, the group stated that it presently expects to realize its earnings expectations for the complete 12 months. I’m not precisely positive what these expectations are however the market is presently searching for 18p per share in earnings.
We have now carried the constructive momentum seen on the finish of 2025 into 2026, with buying and selling performing in keeping with our expectations.
Domino’s Pizza CEO Nicola Frampton
Tasty new merchandise
It’s price noting that on the product entrance, the corporate stated that it efficiently launched ‘CHICK ‘N’ DIP’ throughout the quarter. Preliminary buying and selling efficiency right here met expectations with constructive suggestions from prospects.
It additionally stated that it had just lately launched its ‘Italianos’ pizza vary which is constructed on a skinny crust pizza assortment. I believe this might be a winner for the corporate – shoppers as we speak are sometimes searching for any such pizza.
So total, enterprise efficiency seems to be sturdy. Nonetheless, there doesn’t appear to be any signal of a serious slowdown from GLP-1 weight-loss medication, which is a future threat.
How’s the valuation?
As for the valuation, the inventory nonetheless seems to be low cost. If we take that 18p per share earnings forecast and evaluate it to the present share worth of 201p, we get a forward-looking price-to-earnings (P/E) ratio of simply 11.
That strikes me pretty much as good worth. Particularly when you think about the corporate’s sturdy model and excessive return on capital.
What concerning the dividend yield?
Zooming in on the dividend yield, it’s nonetheless very enticing, regardless of the current share worth rise. With analysts anticipating a payout of 11.1p per share for 2026, we’re taking a look at a yield of round 5.5%.
It’s price stating that dividend protection (the ratio of earnings per share to dividends per share) is stable at round 1.6. That’s one of many causes I highlighted the inventory just a few weeks in the past – it has significantly better dividend protection than lots of different high-yield UK shares.
Put all this collectively, and there’s so much to love about Domino’s from an funding perspective. I imagine this inventory is worthy of additional analysis.
