Financial Survey: Noodles & (NDLS) & Domino’s Pizza (DPZ)

Noodles & (NASDAQ: NDLS) and Domino’s Pizza (NYSE:DPZ) are both retail/wholesale companies, but which is the better stock? We will compare the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Noodles & and Domino’s Pizza, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noodles & 1 6 0 0 1.86
Domino’s Pizza 0 8 9 0 2.53

Noodles & presently has a consensus target price of $4.79, indicating a potential upside of 6.35%. Domino’s Pizza has a consensus target price of $208.14, indicating a potential upside of 16.97%. Given Domino’s Pizza’s stronger consensus rating and higher probable upside, analysts clearly believe Domino’s Pizza is more favorable than Noodles &.

Risk and Volatility

Noodles & has a beta of -0.52, meaning that its stock price is 152% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Valuation and Earnings

This table compares Noodles & and Domino’s Pizza’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Noodles & $487.47 million 0.37 -$71.67 million ($3.19) -1.41
Domino’s Pizza $2.47 billion 3.15 $214.67 million $5.24 33.96

Domino’s Pizza has higher revenue and earnings than Noodles &. Noodles & 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 Noodles & and Domino’s Pizza’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noodles & -17.42% -10.25% -2.10%
Domino’s Pizza 9.47% -12.59% 34.19%

Dividends

Domino’s Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 1.0%. Noodles & does not pay a dividend. Domino’s Pizza pays out 35.1% of its earnings in the form of a dividend. Domino’s Pizza has increased its dividend for 3 consecutive years.

Insider and Institutional Ownership

66.2% of Noodles & shares are owned by institutional investors. Comparatively, 94.2% of Domino’s Pizza shares are owned by institutional investors. 52.7% of Noodles & shares are owned by company insiders. Comparatively, 3.6% of Domino’s Pizza shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Domino’s Pizza beats Noodles & on 13 of the 16 factors compared between the two stocks.

Noodles & Company Profile

Noodles & Company develops and operates fast casual restaurants. The Company’s menu includes a range of cooked-to-order dishes, including noodles and pasta, soups, salads, sandwiches and appetizers. The Company has approximately 490 restaurants, including 420 Company-owned and 70 franchised locations, across 40 states, the District of Columbia and one Canadian province. The Company offers over 30 globally inspired Asian, Mediterranean and American dishes together on a single menu. The Company offers approximately 10 fresh vegetables and six proteins, including marinated steak, naturally raised pork, chicken, meatballs, shrimp and organic tofu. The Company offers Kids Meals, which includes sides, such as broccoli, carrots, fruit, applesauce and a portion of its housemade rice crispy treat. The Company’s restaurants’ locations include Arizona, California, Colorado, Delaware, New York, North Dakota, Ohio, Texas, Utah, Virginia, Washington and Wisconsin.

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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