Domino's Pizza, Inc.

(New York Stock Exchange)
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Bullish +75

1 Reason the Final Stock Warren Buffett Bought Is the Ultimate Millionaire-Maker

AI-generated analysis

πŸ• Domino's Pizza is the world's largest pizza chain with over 22,300 locations in more than 90 markets.

πŸ’Ό Warren Buffett and Berkshire Hathaway recently added shares, holding a 9.9% stake worth millions after buying over the last two quarters.

πŸ“ˆ The company generates over $20 billion annually primarily from franchisees who own and operate 99% of its stores.

πŸ“Š Financial results show global revenue growing 3.4% year-over-year while income from operations rose 7.9%.

πŸ’° Domino's pays a dividend with a 2.4% yield that has more than doubled over the past five years.

πŸ”„ The company is also buying back shares, having authorized a $1 billion repurchase program to boost shareholder value.

πŸ“‰ Valuation metrics look favorable with a forward P/E ratio of 17 compared to a five-year average of 26.

πŸ“ˆ Historical performance shows the stock has averaged 21% annual gains over the past 15 years.

⚠️ Inflation remains a risk as it can erode profits or force price hikes that might reduce consumer demand.

πŸ’Š The popularity of GLP-1 weight-loss drugs could potentially lead to fewer orders for pizza in the future.

πŸ€– The article notes Warren Buffett has recently stepped down as CEO but still influences Berkshire's investment decisions.

πŸ“‰ Motley Fool Stock Advisor does not recommend buying Domino's right now despite acknowledging its merits.

πŸš€ Instead, they highlight their top 10 list which includes past winners like Netflix and Nvidia that generated massive returns.

πŸ‘₯ The article suggests investors might miss the opportunity if they only focus on current Motley Fool rankings.

πŸ“ Disclosure notes indicate authors have positions in both Berkshire Hathaway and Domino's Pizza stocks.

πŸ† Domino's stock yield including buybacks reaches approximately 5.5% when combined with the dividend payout.

πŸ› οΈ Management has demonstrated strong business growth capabilities according to long-term track records.

🎯 The narrative frames Domino's as a potential "millionaire-maker" following Buffett's latest investment moves.

πŸ“… Recent Berkshire purchases occurred in Q3 and Q4 of 2025 with share prices of $435 and $417 respectively.

Bullish Signals
  • Domino's is the world's largest pizza chain with over 22,300 locations in more than 90 markets.
  • The company generates over $20 billion annually, primarily through its franchise model which owns and operates 99% of its stores.
  • First-quarter results showed robust growth, including year-over-year global revenue growth of 3.4% and income from operations rising 7.9% on a currency-adjusted basis.
  • Management has authorized the repurchase of $1 billion worth of stock, signaling confidence in the company's value.
  • The stock has delivered strong long-term performance, averaging annual gains of 21% over the past 15 years and 12% over the past decade.
  • As a dividend payer, Domino's offers a yield of 2.4%, which is about twice that of the S&P 500, with a total shareholder yield around 5.5% when including buybacks.
  • The company has more than doubled its dividend payout over the past five years, providing growing income for shareholders.
  • Domino's forward-looking P/E ratio of 17 is well below its five-year average of 26, suggesting the shares are considerably undervalued.
Risk Factors
  • Persistent inflation poses a risk that could erode Domino's profits or force price hikes that deter consumers.
  • The increasing popularity of GLP-1 weight-loss drugs presents a specific demand-side threat by potentially reducing the number of pizza orders.
  • Domino's was excluded from The Motley Fool Stock Advisor's list of 10 best stocks to buy, which may indicate analysts believe there are superior investment opportunities available.
Full Analysis
Warren Buffett's Berkshire Hathaway has recently increased its position in Domino's Pizza, acquiring 1.3 million shares in the third quarter of 2024 at an average price of $435 and another 368,055 shares in the fourth quarter of 2025 at $417 per share. This latest purchase brings Berkshire's total ownership to 3.35 million shares, representing 9.9% of the company's outstanding stock. Although Buffett has stepped down as CEO, his involvement with investment decisions remains a key factor influencing such moves, and he still consults with Berkshire's leadership team. Domino's Pizza is highlighted as the world's leading pizza chain, operating over 22,300 locations in more than 90 markets globally. Approximately 99% of its stores are owned and operated by franchisees, while the corporate entity manages real estate, distribution, marketing, and technology. In its first quarter reported in late April, the company posted a year-over-year revenue increase of 3.4%, with income from operations rising 7.9% on a currency-adjusted basis. The stock has historically delivered strong performance, averaging annual gains of 21% over the past 15 years and 12% over the last decade. Beyond growth, Domino's offers investors a dividend yield of roughly 2.4%, which is about double the S&P 500 average, and management has authorized $1 billion in stock repurchases. Over the last five years, the dividend payout has more than doubled, contributing to a total shareholder yield around 5.5% when combined with buybacks. The stock's current forward P/E ratio is approximately 17, significantly lower than its five-year average of 26, suggesting potential undervaluation relative to historical norms. However, the analysis also outlines specific risks associated with investing in Domino's Pizza. Persistent inflation could impact consumer spending power or force price increases that might deter customers. Additionally, there is growing concern regarding the impact of GLP-1 weight-loss drugs, which could reduce overall caloric consumption and potentially lower demand for pizza. While not included in a recent list of top 10 stocks recommended by The Motley Fool's Stock Advisor service due to its current holding status, the company remains a prominent subject among value investors following Berkshire Hathaway's accumulating position.