Reviewing Domino’s Pizza (NASDAQ:DPZ) and Compass Group (OTCMKTS:CMPGY)

Domino’s Pizza (NASDAQ:DPZ) and Compass Group (OTCMKTS:CMPGY) are both large-cap retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.

Profitability

This table compares Domino’s Pizza and Compass Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Domino’s Pizza	12.16%	-14.91%	33.28%
Compass Group	N/A	N/A	N/A

Volatility and Risk

Domino’s Pizza has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Compass Group has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Earnings and Valuation

This table compares Domino’s Pizza and Compass Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Domino’s Pizza	$4.71 billion	3.10	$584.17 million	$17.11	25.23
Compass Group	$46.07 billion	1.14	$1.87 billion	N/A	N/A

Compass Group has higher revenue and earnings than Domino’s Pizza.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Domino’s Pizza and Compass Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Domino’s Pizza	2	11	12	2	2.52
Compass Group	0	0	2	2	3.50

Domino’s Pizza presently has a consensus target price of $490.40, suggesting a potential upside of 13.59%. Given Domino’s Pizza’s higher probable upside, analysts plainly believe Domino’s Pizza is more favorable than Compass Group.

Insider & Institutional Ownership

94.6% of Domino’s Pizza shares are owned by institutional investors. Comparatively, 0.0% of Compass Group shares are owned by institutional investors. 0.8% of Domino’s Pizza shares are owned by company insiders. Comparatively, 0.0% of Compass Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Domino’s Pizza pays an annual dividend of $6.96 per share and has a dividend yield of 1.6%. Compass Group pays an annual dividend of $0.41 per share and has a dividend yield of 1.3%. Domino’s Pizza pays out 40.7% of its earnings in the form of a dividend. Domino’s Pizza has raised its dividend for 12 consecutive years. Domino’s Pizza is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Domino’s Pizza beats Compass Group on 10 of the 15 factors compared between the two stocks.

About Domino’s Pizza

Domino’s Pizza, Inc., through its subsidiaries, operates as a pizza company in the United States and internationally. The company operates through three segments: U.S. Stores, International Franchise, and Supply Chain. It offers pizzas under the Domino’s brand name through company-owned and franchised stores. It also provides oven-baked sandwiches, pastas, boneless chicken and chicken wings, breads and dips, desserts, and soft drink products, as well as loaded tots and pepperoni stuffed cheesy breads. Domino’s Pizza, Inc. was founded in 1960 and is headquartered in Ann Arbor, Michigan.

About Compass Group

Compass Group PLC operates as a food and support services company in North America, Europe, and internationally. The company offers support services, such as cleaning in hospitals; reception services at corporate headquarters; managing remote camps; grounds and facilities services at schools and universities; and others. It serves business and industry; healthcare and senior living market; education; sports and leisure; and defense, offshore, and remote sectors. Compass Group PLC was founded in 1941 and is based in Chertsey, the United Kingdom.