Domino’s Pizza Enterprises Ltd. and Slater & Gordon Limited: Red hot companies to drive your future wealth

Higher earnings this reporting season are showcasing the future growth potential of Slater & Gordon Limited (ASX: SGH) and Domino’s Pizza Enterprises Ltd. (ASX: DMP).

| More on:

If you’re on the hunt for strong growth stocks to get your portfolio fired up this year, then you don’t have look much further than these two stocks: Slater & Gordon Limited (ASX: SGH) and Domino’s Pizza Enterprises Ltd. (ASX: DMP).

They have made great gains over the past two years, delighting their shareholders and within the past week they are both up 8% or more. I wouldn’t tell you to chase them just because of one week’s gains, but the rises do underline the potential growth of each stock from here on out. This is what you need to know.

Slater & Gordon is a law firm that has a network of offices under the brand names of Slater & Gordon, Trilby Misso Lawyers, Conveyancing Works, as well as Russell Jones & Walker and Claims Direct in the UK. Its full year results out this month showed a 27.9% gain in earnings per share and a 21% increase in full year dividends.

Also, it announced two more acquisitions, which is in keeping with its high growth. Like a chain store, it is taking over other law practices and expanding across the states. It has an 18 PE, which is at the top of its past average PE range, but earnings are forecast by analyst consensus to possibly rise a compound 10% annually over the next two years. The potential growth could justify such a PE ratio.

Domino’s Pizza is up about 14% after announcing a 50.4% rise in net profit for FY 2014. A lot of the earnings growth came from its 75% owned Domino’s Pizza Japan, which could potentially double the number of existing stores in Japan to about 600 over the next five years.

Chain restaurants have great growth potential when there are still a lot of regions to move into. That’s why I would recommend this company. However, it does have a 43 PE, so I’m not too hot on the price. It would have to keep growing earnings 20% – 30% annually to make such a high PE make sense. It’s possible, yet for now put it on the watchlist and wait for corrections to buy.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

The share price of ASX infant products retailer Baby Bunting Group Ltd (ASX:BBN) has been a solid performer so far …

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

A new landmark report by the Intergovernmental Panel on Climate Change (IPCC) was released earlier this week. It provided a …

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest …

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos Limited (ASX: AMS) share price has been on a tear this past week, rising 15% on the back …

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

Online furniture retailer Temple & Webster Group Ltd (ASX: TPW) had a breakout year in 2020, moving from relative obscurity …

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

Shares in ASX healthcare company Polynovo Limited (ASX: PNV) almost doubled in price last year. And, despite a shaky start …

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

Investing in other geographic markets has become a popular way to diversify a portfolio. The risks associated with being exposed …

Read more »

person reading news on mobile phone
⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

Despite the News Corporation (ASX: NWS) share price getting a 31% bump between November last year and today, News Corp …

Read more »