Dominos Pizza Competitive Advantage Essay

1503 Words Oct 18th, 2013 7 Pages
Finding a company with Durable Competitive Advantage: Domino´s Pizza Group plc Value Investing. Autumn 2013

Author: Jero R. Marin. September 2013 Introduction Domino´s Pizza Group PLC (DPG) is the UK and Ireland's leading pizza delivery company and holds the master franchise to own, operate and franchise Domino's Pizza stores in these markets and also in Germany and Switzerland. It is a company based in UK and it
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These are the parameters used for the screener (see ex.1 for details and number of active companies that match each criteria): 1. 2. 3. 4. 5. 6. 7. Market cap >= 500 million USD EPS yearly Compounded growth Rate (past 5 years) >= 12% Sales yearly Compounded growth Rate (past 5 years) >= 10% LTG_CM >=15% ROE 5years average >= 20% ROA 5years average >= 8% Gross Margin yearly compounded growth Rate (past 5 years) >= 10%

Value Investing

Finding a company with Durable Competitive Advantage: Domino´s Pizza Group plc

Parameter 2 secure that we filter companies that are growing in sales (which is a parameter that is difficult to distort by accounting policies) but at the same time parameters 3 and 7 corroborate that this growth is not at the expense of squeezing margins. Parameter 4 includes the consensus Long Term growth rate to filter at a first attempt those companies which are in industries that are growing but are not expected to keep the pace of growth. Parameters 5 and 6 forces the screener to filter those companies which are growing but over a reasonable asset base and not on top on excessive investments or by borrowing massively. In summary I understand that this mix of parameters are a good quantitative estimation of what a competitive advantage should be based on. 2. Screening results

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