Head to Head Comparison: Domino’s Pizza (DPZ) versus Rave Restaurant Group (RAVE)

Domino’s Pizza (NYSE:DPZ) and Rave Restaurant Group (NASDAQ:RAVE) are both retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.

Volatility and Risk

Domino’s Pizza has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, Rave Restaurant Group has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Valuation & Earnings

This table compares Domino’s Pizza and Rave Restaurant Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Domino’s Pizza $2.79 billion 4.05 $277.90 million $5.34 50.84
Rave Restaurant Group $15.12 million 1.36 $1.91 million N/A N/A

Domino’s Pizza has higher revenue and earnings than Rave Restaurant Group.

Institutional and Insider Ownership

94.2% of Domino’s Pizza shares are owned by institutional investors. Comparatively, 3.5% of Rave Restaurant Group shares are owned by institutional investors. 4.0% of Domino’s Pizza shares are owned by insiders. Comparatively, 51.2% of Rave Restaurant Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Domino’s Pizza and Rave Restaurant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Domino’s Pizza 10.60% -11.92% 38.83%
Rave Restaurant Group N/A 69.63% 26.79%

Dividends

Domino’s Pizza pays an annual dividend of $2.20 per share and has a dividend yield of 0.8%. Rave Restaurant Group does not pay a dividend. Domino’s Pizza pays out 41.2% of its earnings in the form of a dividend. Domino’s Pizza has raised its dividend for 4 consecutive years.

Analyst Ratings

This is a summary of recent ratings and target prices for Domino’s Pizza and Rave Restaurant Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Domino’s Pizza 0 8 13 0 2.62
Rave Restaurant Group 0 0 0 0 N/A

Domino’s Pizza presently has a consensus price target of $272.86, indicating a potential upside of 0.51%. Given Domino’s Pizza’s higher probable upside, equities analysts clearly believe Domino’s Pizza is more favorable than Rave Restaurant Group.

Summary

Domino’s Pizza beats Rave Restaurant Group on 11 of the 14 factors compared between the two stocks.

Domino’s Pizza Company Profile

Domino's Pizza, Inc., through its subsidiaries, operates as a pizza delivery company in the United States and internationally. It operates through three segments: Domestic Stores, International Franchise, and Supply Chain. The company offers pizzas under the Domino's Pizza brand name through company-owned and franchised Domino's Pizza stores. As of June 18, 2018 it operated approximately 15,000 stores in approximately 85 markets. Domino's Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

Rave Restaurant Group Company Profile

Rave Restaurant Group, Inc., together with its subsidiaries, operates and franchises pizza buffet, delivery/carry-out (delco), and express restaurants under the Pizza Inn trademark. It operates in two segments, Franchising and Food and Supply Distribution; and Company-Owned Restaurants. The company's buffet restaurants, which are located in free standing buildings or strip centers in retail developments that offer dine-in, carryout, and catering services, as well as delivery services. Its delco restaurants provide delivery and carryout services that are located in shopping centers or other in-line retail developments. The company's Express restaurants serve customers through various non-traditional points of sale that are located in convenience stores, food courts, college campuses, airport terminals, travel plazas, athletic facilities, or other commercial facilities. Rave Restaurant Group, Inc. also operates and franchises fast casual restaurants under the Pie Five Pizza Company or Pie Five trademark. As of September 25, 2017, it owned, operated, and franchised approximately 300 Pie Five Pizza Co. and Pizza Inn restaurants in the United States and internationally. The company was formerly known as Pizza Inn Holdings, Inc. and changed its name to Rave Restaurant Group, Inc. in January 2015. Rave Restaurant Group, Inc. was founded in 1958 and is based in The Colony, Texas.

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