Editor's note: In this edition of "360 Degrees," RealMoney commentators take a look at Domino's Pizza (DPZ). Shares of the pizza-delivery chain rose steadily from the company's IPO in 2004 through March of this year, but have since dropped about 20%. Has the stock gone stale, or can we expect it to heat back up?TheStreet.com has always believed that offering a wide variety of opinions and viewpoints -- rather than a monolithic "house view" -- helps readers make better-informed investment decisions. In that spirit, we bring you "360 Degrees." "360 Degrees" is a feature that takes advantage of our varied stable of contributors to RealMoney, who offer analysis of stocks and the markets from all angles -- fundamental vs. technical, short-term trader vs. long-term investor. Click on the following link for information about a free trial to RealMoney.
Pizza Guy, by Frank X. Curzio
This is an excerpt from a column that was originally published on RealMoney on July 11 at 8:32 a.m. EDTDomino's ( DPZ), which began trading on the New York Stock Exchange in July 2004, is the largest pizza delivery company in the U.S. It operates through a network of 8,079 stores in 50 countries and all 50 states. Domino's has many advantages over chief rival Papa John's ( PZZA), including brand recognition with top marketing affiliates such as Coca-Cola ( KO) and Nascar. Domino's also has a strong international presence, which can be compared with those of Starbucks ( SBUX), McDonald's ( MCD) and Yum! Brands ( YUM). Because Domino's is not an eat-in restaurant, it operates more efficiently than competitors. It essentially provides the same product mix while using less square footage and fewer employees. Domino's and Papa John's are both expected to grow at 11%, but Domino's trades at just 13 times next year's earnings, compared with 21 times for Papa John's. Given Domino's competitive advantages, this valuation gap will be remedied over time.