Forget Papa John's and Pizza Hut, Buy Domino's Stock

Shares of Papa John's PZZA surged on Wednesday following the company’s announcement that it ended its partnership as the official pizza sponsor of the NFL. At the same time, the league’s new pizza partner, Yum Brands’ YUM Pizza Hut, saw its stock price pop as well.

Papa John’s also topped our revenue estimates after it reported $467.6 million in Q4 sales on Tuesday. Yet, the company fell short of fourth quarter earnings estimates and saw its North American comparable store sales dip by 3.9%—which is a trend the company expects to continue (also read: Papa John's Stock Dips As Q4 Domestic Sales Sink).

Meanwhile, Pizza Hut has been a drag on Yum in recent years, with some suggesting that the company divest the pizza chain. Its new partnership, amid slumping NFL television ratings, might be Yum’s final effort to boost sales.

Yet, with all of this talk about two pizza chains that are currently facing significant headwinds, investors might want to consider another pizza chain that is poised to expand both its top and bottom lines.

Domino's Pizza, Inc. DPZ

Domino’s has become one of the world’s largest fast-food chains, now boasting more than 14,800 stores in over 85 international markets. Last week, Domino’s posted 4.2% domestic same-store sales growth, which led to 7.7% growth for the full year. The company, which opened 829 new locations outside of North America in 2017, saw its international comp-store sales climb by 3.4% for the year. This marked the 24th straight year of positive international same-store sales growth for Domino’s.

The pizza chain has become an international powerhouse while also maintaining strong domestic sales. Domino’s recently reaffirmed its three-to-five year outlook that calls for global retail sales growth of 8% to 12% and domestic and international same-store sales growth of 3% and 6%.

Domino’s has also been on top of consumers trends. The company has built up its mobile and online ordering platforms to accommodate for customers that crave this ability. In order to expand its reach in other ways, Domino’s also upped its in-store, carry-out deals and began to revamp restaurants.

The pizza chain also recently partnered with Ford (F) to test new self-driving car technology, which could one day become a large part of Domino’s business model (also read: Ford Teams With Domino's and Postmates on Self-Driving Car Project).

Looking ahead to the first quarter of 2018, Domino’s is projected to see its earnings soar by over 40% to hit $1.77 per share, based on our current Zacks Consensus Estimate. Domino’s sales are projected to climb by 10% to hit $3.07 billion for the full year, while its earnings are expected to skyrocket 48.50%.

What’s more, Domino’s has met or topped earnings estimates in the trailing seven periods and is expected to see its earnings climb at an annualized rate of 15.17% over the next three to five years.

Investors should also be happy to note that Domino’s is currently a Zacks Rank #2 (Buy) and rocks an “A” grade for Growth in our Style Scores system.

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