Domino’s Pizza (DMP) View
Hi MM, Given the poor announced result, is DMP a yield play for the longer term at current pricing. Regards, Peter
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Answer
Hi Peter,
Unfortunately, this poor-quality announcement is becoming a habit for DMP with the stock down ~80% from its 2023 high, and substantially more from where it was trading in 2021. This time around the stock plummeted after the company slashed its dividend and said sales have fallen even faster in the new FY.
- DMP swung to a $3.7mn loss in FY25 from a $96mn profit in FY, while it more than halved its dividend.
The company’s now focusing on reducing costs and simplifying operations to improve its profitability; we’ve heard that a few times this reporting season. DMP is now forecast to yield ~5% over the next 12-months but a stock that is making a loss, halving its dividend, and plunging more than 20% in one day, could easily become a yield trap and it’s not for us.
