Calculating Your Dividend Earnings with Domino’s Pizza
Many companies reward shareholders by issuing dividends, a practice that many investors appreciate. If you’re interested in dividend-paying stocks, consider Domino’s Pizza (NYSE: DPZ), which has increased its payouts for twelve consecutive years.
Curious about how many shares of Domino’s Pizza you would need to own to collect $1,000 in annual dividends? The calculation is straightforward.
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Understanding Dividend Payments
Currently, Domino’s offers a quarterly dividend of $1.51 per share. Historically, the company has increased these payouts significantly, with a more than 600% rise since 2012. However, for our calculations, let’s assume the dividend remains at this level, leading to an annual payment of $6.04.
To reach $1,000 in dividends, divide that amount by $6.04, resulting in approximately 166 shares needed. As of December 10, Domino’s stock was priced at about $465. By multiplying the number of shares (166) by the stock price ($465), an investment of $77,190 would be required.
Domino’s is known for its competitive prices, numerous locations, and quick delivery services. The company has been consistently opening new restaurants, despite its substantial existing presence.
Notably, Domino’s has achieved same-store sales growth for 30 years in a row, and the trend is expected to continue into 2024. In the latest fiscal third quarter, which ended on September 8, U.S. same-store sales rose by 3%, while international sales increased by 0.8%. However, earnings growth has moderated, with operating income rising by 5.7%, excluding foreign exchange impacts.
Weighing Your Options in Dividend Stocks
For investors seeking stocks that yield reliable income, alternatives may offer higher dividend yields compared to Domino’s 1.3%. This is only slightly above the S&P 500’s average yield of 1.2%. Notably, Domino’s maintains a payout ratio of 33%, allowing for potential future increases in dividend payments.
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*Stock Advisor returns as of December 9, 2024
Lawrence Rothman, CFA, has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino’s Pizza. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
