Reviewing Domino’s Pizza (NASDAQ:DPZ) and Dine Brands Global (NYSE:DIN)
by Danessa Lincoln · The Markets DailyDine Brands Global (NYSE:DIN – Get Free Report) and Domino’s Pizza (NASDAQ:DPZ – Get Free Report) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
Insider & Institutional Ownership
92.8% of Dine Brands Global shares are owned by institutional investors. Comparatively, 94.6% of Domino’s Pizza shares are owned by institutional investors. 6.7% of Dine Brands Global shares are owned by company insiders. Comparatively, 0.9% of Domino’s Pizza shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Dine Brands Global and Domino’s Pizza”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dine Brands Global | $900.00 million | 0.50 | $17.10 million | $0.47 | 75.03 |
| Domino’s Pizza | $5.07 billion | 2.10 | $601.70 million | $18.15 | 17.79 |
Domino’s Pizza has higher revenue and earnings than Dine Brands Global. Domino’s Pizza is trading at a lower price-to-earnings ratio than Dine Brands Global, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Dine Brands Global and Domino’s Pizza’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dine Brands Global | 0.75% | -20.34% | 3.17% |
| Domino’s Pizza | 12.03% | -15.48% | 34.38% |
Analyst Ratings
This is a summary of current ratings and target prices for Dine Brands Global and Domino’s Pizza, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dine Brands Global | 0 | 9 | 0 | 0 | 2.00 |
| Domino’s Pizza | 1 | 15 | 15 | 1 | 2.50 |
Dine Brands Global presently has a consensus price target of $33.25, indicating a potential downside of 5.71%. Domino’s Pizza has a consensus price target of $380.87, indicating a potential upside of 17.93%. Given Domino’s Pizza’s stronger consensus rating and higher probable upside, analysts clearly believe Domino’s Pizza is more favorable than Dine Brands Global.
Volatility & Risk
Dine Brands Global has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.
Dividends
Dine Brands Global pays an annual dividend of $0.76 per share and has a dividend yield of 2.2%. Domino’s Pizza pays an annual dividend of $7.96 per share and has a dividend yield of 2.5%. Dine Brands Global pays out 161.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Domino’s Pizza pays out 43.9% of its earnings in the form of a dividend. Domino’s Pizza has increased its dividend for 12 consecutive years. Domino’s Pizza is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Domino’s Pizza beats Dine Brands Global on 16 of the 18 factors compared between the two stocks.
About Dine Brands Global
Dine Brands Global, Inc., together with its subsidiaries, owns, franchises, and operates restaurants in the United States and internationally. The company operates through six segments: Applebee's Franchise Operations, International House of Pancakes (IHOP) Franchise Solutions, Fuzzy's franchise operations, Rental Operations, Financing Operations, and Company-Operated Restaurant Operations. It owns and franchises three restaurant concepts, including Applebee's Neighborhood Grill + Bar within the casual dining category; and IHOP in the family dining category of the restaurant industry; Fuzzy's Taco Shop within the fast-casual dining category. In addition, its Applebee's restaurants offer American fare with drinks and local draft beers; IHOP restaurants provide full table services, food and beverage; and Fuzzy's Taco Shop offers baja-style mexican food like baja tacos, chips and queso, guacamole and salsa made in house, and a full bar including margaritas, and cold draft beer. The company was formerly known as DineEquity, Inc. and changed its name to Dine Brands Global, Inc. in February 2018. Dine Brands Global, Inc. was founded in 1958 and is headquartered in Pasadena, California.
About Domino’s Pizza
Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.