Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi MM, With DMP getting price hammered today, do you see either DMP or CKF as dividend/growth stocks with potential? DMP will have a ex dividend date coming in late August - any idea what the dividend might be? Thanks, Peter
Hi Peter,
Firstly, Dominos is forecast to pay a ~47c dividend on the 28th of August, while the stocks forecast to yield 2.9% pa over the next 12-months. Unfortunately, this week’s trading update confirmed what we had thought and written about for some time, a stock that remains on a growth multiple, that is no longer growing. We see nothing in DMP to prompt us catching this particular falling knife. As is usually the case, stocks in aggressive downtrends will bounce strongly akin to a ping pong ball falling down a staircase, but it will eventually reach the bottom – avoiding DMP over the last few years has been the right call and its highly unlikely we will consider buying DMP in 2024.
Secondly, looking at Collins Foods Ltd (CKF), the owner of KFC and Taco Bell franchises is starting to show value as it slips under $9 but even with a 4.6% yield on offer its not on our radar – we would call it an “ok” yield play at current levels, but there are better opportunities out there in MM’s view.
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