Vikramaditya_Rai/iStock Editorial via Getty Images
On July 13, 2004, Domino's Pizza (NASDAQ:DPZ) had an IPO that Forbes described as "unappetizing". Since then, it has delivered total returns in excess of the S&P 500 and investor darlings such
Domino's Pizza's Asset Light Model Is Driving Exceptional Returns
Summary
- Domino’s Pizza is one of the largest pizza companies in the world.
- The company has significant scale advantages and a strong brand that allows it to defend its profitability.
- Its business model is a virtuous circle in which franchise costs go down as the company grows, attracting even more entrepreneurs.
- Domino’s asset-light business model drives very high returns on invested capital and allows it to grow quickly while aggressively giving cash back to investors.
- The company’s free cash flows are growing and priced at an attractive rate.
I am an independent investor working as a financial journalist for a B2B title in London, UK. I have experience investing in US stocks, particularly tech and bio stocks, with a growing interest in the crypto-currency space. My investment strategy is long term growth with a diversified portfolio. I'm a colleague of Stuart Barnes who also writes for Seeking Alpha as Stubarnes. We do not comment on each other's analyses nor cover the same stocks or investment instruments. We also have completely divergent investment strategies. None of our opinions should be taken as financial advice.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.