Domino’s Pizza (NYSE: DPZ) and Jack In The Box (NASDAQ:JACK) are both mid-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitabiliy, analyst recommendations, valuation and dividends.

Valuation and Earnings

This table compares Domino’s Pizza and Jack In The Box’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Domino’s Pizza $2.56 billion 3.61 $499.98 million $4.68 41.11
Jack In The Box $1.62 billion 1.70 $354.51 million $4.05 23.15

Domino’s Pizza has higher revenue and earnings than Jack In The Box. Jack In The Box is trading at a lower price-to-earnings ratio than Domino’s Pizza, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Domino’s Pizza and Jack In The Box’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Domino’s Pizza 9.06% -12.21% 33.25%
Jack In The Box 8.07% -49.06% 10.78%

Volatility and Risk

Domino’s Pizza has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, Jack In The Box has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.

Dividends

Domino’s Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 1.0%. Jack In The Box pays an annual dividend of $1.60 per share and has a dividend yield of 1.7%. Domino’s Pizza pays out 39.3% of its earnings in the form of a dividend. Jack In The Box pays out 39.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Domino’s Pizza has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for Domino’s Pizza and Jack In The Box, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Domino’s Pizza 0 12 7 0 2.37
Jack In The Box 1 3 9 0 2.62

Domino’s Pizza currently has a consensus price target of $191.43, indicating a potential downside of 0.50%. Jack In The Box has a consensus price target of $117.33, indicating a potential upside of 25.13%. Given Jack In The Box’s stronger consensus rating and higher possible upside, analysts plainly believe Jack In The Box is more favorable than Domino’s Pizza.

Institutional and Insider Ownership

98.9% of Domino’s Pizza shares are owned by institutional investors. Comparatively, 93.9% of Jack In The Box shares are owned by institutional investors. 3.6% of Domino’s Pizza shares are owned by insiders. Comparatively, 2.1% of Jack In The Box shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Domino’s Pizza beats Jack In The Box on 12 of the 17 factors compared between the two stocks.

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.

Jack In The Box Company Profile

Jack in the Box Inc. operates and franchises Jack in the Box quick-service restaurants (QSRs) and Qdoba Mexican Eats (Qdoba) fast-casual restaurants. The Company operates in two segments: Jack in the Box and Qdoba restaurant operations. Qdoba is a fast-casual Mexican food brand in the United States, offering food items including burritos, tacos, salads, and quesadillas. Jack in the Box is a hamburger chain, which offers a selection of products, including classic burgers such as, Jumbo Jack burgers, and new product lines, such as Buttery Jack burgers, and its Brunchfast menu. As of October 2, 2016, the Company operated 2,954 Jack in the Box QSRs and Qdoba fast-casual restaurants. As of October 2, 2016, Jack in the Box system included 2,255restaurants, of which 417 were company-operated and 1,838 were franchise operated. As of October 2, 2016, the Qdoba system included 699 restaurants, of which 367 were company operated and 332 were franchise operated.

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