Comparing Chipotle Mexican Grill (NYSE:CMG) and Domino's Pizza (DPZ)

Chipotle Mexican Grill (NYSE: CMG) and Domino's Pizza (NYSE:DPZ) are both mid-cap cyclical consumer goods & services companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, analyst recommendations, profitability, institutional ownership and earnings.

Valuation and Earnings

This table compares Chipotle Mexican Grill 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
Chipotle Mexican Grill $3.90 billion 2.35 $22.93 million $5.16 63.08
Domino's Pizza $2.47 billion 3.71 $214.67 million $5.25 39.97

Domino's Pizza has lower revenue, but higher earnings than Chipotle Mexican Grill. Domino's Pizza is trading at a lower price-to-earnings ratio than Chipotle Mexican Grill, indicating that it is currently the more affordable of the two stocks.

Dividends

Domino's Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 0.9%. Chipotle Mexican Grill does not pay a dividend. Domino's Pizza pays out 35.0% of its earnings in the form of a dividend. Domino's Pizza has increased its dividend for 4 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Chipotle Mexican Grill and Domino's Pizza, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chipotle Mexican Grill 4 22 8 0 2.12
Domino's Pizza 0 7 13 0 2.65

Chipotle Mexican Grill presently has a consensus target price of $351.62, indicating a potential upside of 8.03%. Domino's Pizza has a consensus target price of $211.96, indicating a potential upside of 1.01%. Given Chipotle Mexican Grill’s higher possible upside, equities research analysts plainly believe Chipotle Mexican Grill is more favorable than Domino's Pizza.

Insider and Institutional Ownership

88.4% of Chipotle Mexican Grill shares are held by institutional investors. Comparatively, 94.2% of Domino's Pizza shares are held by institutional investors. 2.0% of Chipotle Mexican Grill shares are held by insiders. Comparatively, 3.6% of Domino's Pizza shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Chipotle Mexican Grill and Domino's Pizza’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chipotle Mexican Grill 3.37% 11.80% 8.11%
Domino's Pizza 9.47% -12.59% 34.19%

Volatility & Risk

Chipotle Mexican Grill has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, Domino's Pizza has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Summary

Domino's Pizza beats Chipotle Mexican Grill on 11 of the 17 factors compared between the two stocks.

Chipotle Mexican Grill Company Profile

Chipotle Mexican Grill, Inc. (Chipotle), together with its subsidiaries, operates Chipotle Mexican Grill restaurants. The Company’s Chipotle Mexican Grill restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2016, the Company managed its operations and restaurants based on 11 regions. As of December 31, 2016, the Company operated 2,198 Chipotle restaurants throughout the United States, as well as 29 international Chipotle restaurants, and it also had 23 restaurants in operation in other non-Chipotle concepts. As of December 31, 2016, 29 of its restaurants were located outside of the United States, with 17 in Canada, six in the United Kingdom, five in France and one in Frankfurt, Germany. The Company sells gift cards, which do not have an expiration date. The Company categorizes its restaurants as end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other.

Domino's Pizza Company Profile

Domino’s Pizza, Inc. is a pizza restaurant chain company. As of January 1, 2017, the Company operated in over 13,800 locations in over 85 markets around the world. The Company operates through three segments: domestic stores, international franchise and supply chain. Its basic menu features pizza products in various sizes and crust types. As of January 1, 2017, its Domestic Stores segment consisted primarily of its franchise operations, which consisted of 4,979 franchised stores located in the contiguous United States. As of January 1, 2017, its International Franchise segment consisted of a network of franchised stores in over 85 international markets. As of January 1, 2017, its supply chain segment operated 18 regional dough manufacturing and food supply chain centers in the United States, one thin crust manufacturing center, one vegetable processing center and one center providing equipment and supplies to certain of its domestic and international stores.

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