Investing has gotten a lot more challenging over the past few weeks. Rising economic uncertainty makes it difficult for companies and even individuals to make long-term plans. That could mean a pullback in spending, particularly on high-value items.
But it also means that more may be spent on smaller, more impulsive purchases that act as little luxuries. And that could benefit some companies strongly in the quarters ahead.
One little luxury right now is dining out – or ordering food for delivery. Pizza chain Domino’s Pizza (DPZ) reports that they’re getting higher sales now, all while offering more value for customers compared to competitors.
Domino’s has now grown earnings 21% over the past year, as many restaurant companies have struggled. Profit margins are solid for the industry at 12.4%. And shares are slightly lower over the past year, with the stock dipping from 30 times earnings to about 24 times earnings today.
Action to take: With earnings trending higher and business looking up during an uncertain time for the overall economy, Domino’s could start to gain some traction from here.
Long-term investors may like Domino’s here. Shares also pay a 1.4% dividend.
For traders, the September $540 calls are actively traded. Last going for about $17.00, the options could see mid-double-digit returns from a push higher in shares over the next few months.
Disclosure: The author of this article has no position in the company mentioned here, but may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.