Another day, another Dominos (ASX:DMP) share price all-time high

Domino’s shares continue their impressive run today.

| More on:
two women and a man eating pizza at a party

Image source: Getty Images

The Domino’s Pizza Enterprises Ltd. (ASX: DMP) has stepped into the green during Monday’s session.

Domino’s shares have been on an extended run into the green over the last month, and at market close are up 0.79%, at $157.95.

As such the Domino’s Pizza share price reached another all-time high today, hitting an intraday of $158.43.

What tailwinds are behind the Domino’s Pizza share price?

The Domino’s Pizza share price has been on the move ever since the company reported its FY21 earnings back in August.

In its report, the company achieved record results, growing sales around 15% year on year (YoY) to $3.7 billion. The bolus of this growth was underscored by a 21.5% YoY increase in online sales.

This matched the wider trend in online food retail, which saw a massive uptick secondary to the Covid-19 induced lockdowns in Australia.

As a result, the company recognised net profit after tax (NPAT) of $188.2 million, a 29% increase from the year prior.

Due to these strengths, management increased the dividend payout ratio from 70% to 80% over the year.

The company increased its final dividend to 85.1 cents per share, meaning shareholders enjoyed a total FY21 dividend of $1.74 cents per share. This is a 45% increase from FY20.

Domino’s also achieved a great deal of fundamental momentum across the year. It opened 285 new stores for example, with 126 new stores opened in Japan alone.

Management also managed to pay down $118.7 million of the existing debt load, which free’s up additional capital and future cash flows for the company.

With respect to guidance, management estimates a “record year” for store expansion, and has already achieved network sales growth of almost 8% in FY22.

The Domino’s Pizza share price has gained 24% since its FY21 earnings, and there has been no other market sensitive information for the company over this time.

Therefore, it stands to reason that investors are buying Domino’s shares on the back of this fundamental momentum, and the company’s expected FY22 earnings.

Domino’s Pizza share price snapshot

The Domino’s Pizza share price has gained 81% this year to date, extending the gain over the last 12 months to 91%.

These results have far outpaced the S&P/ASX 200 index (ASX: XJO)’s return of around 25% over the past year.

Should you invest $1,000 in Domino's Pizza Enterprises right now?

Before you consider Domino's Pizza Enterprises, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Domino's Pizza Enterprises wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers