-
Berkshire Hathaway continues to build its position in Domino’s Pizza.
-
The popular pizza chain has become a global giant but still has growth potential.
-
Highly profitable and trading at a discount, Domino’s Pizza seems like a no-brainer.
It seems that the broader stock market has become quite volatile. That goes both ways — stock prices surge at times and plunge at others.
There has been no shortage of drama over the past 24 months, with elections, geopolitical conflicts, economic concerns, and tariffs all impacting the markets. Billionaire and Wall Street legend Warren Buffett, who invests as CEO of Berkshire Hathaway, has been a net seller of stocks amid the volatility, significantly boosting Berkshire’s cash position.
But there is one stock that Buffett has continued to buy. Berkshire invested in Domino’s Pizza (NASDAQ: DPZ) in the third quarter of 2024 and has bought shares each quarter since then. Here is why Domino’s Pizza might appeal to Buffett and Berkshire Hathaway, and whether the stock is still worth buying now.
Berkshire Hathaway currently holds roughly four dozen stocks in its massive $301 billion portfolio, and Buffett has bought and sold many more throughout his long career.
Buffett has probably invested in companies across every market sector by now. Still, he has built a reputation for his affinity for consumer-facing businesses with strong brand moats. While top Berkshire holdings like Apple, Coca-Cola, and American Express couldn’t be any more different from each other, they all have those traits.
Domino’s Pizza does, too. Pizza is a global food staple that transcends cultures and geography. The broader pizza market continues to grow as consumers grapple with higher living expenses. Pizza excels as a feed-the-masses go-to meal, and it’s highly customizable to appeal to just about anyone’s tastes.
The company has created a finely balanced combination of quality, affordability, and convenience. There is usually at least one Domino’s Pizza location in every notable U.S. town or city, and the company has expanded into a global operation with over 21,000 stores.
Pizza’s broad appeal gives Domino’s Pizza a high ceiling for store expansion. The company has opened stores quickly and aggressively, increasing its total store count to:
McDonald’s has over 44,000 stores globally, so there’s plenty of room to keep opening stores, even if Domino’s Pizza is never as prevalent as the burger giant. Domino’s Pizza operates on a franchise model. It charges franchisees fees to open a store and royalties on the sales, generating recurring, profitable revenue streams.
Domino’s Pizza still has a long growth runway ahead. Technology, including a smartphone app and restaurant automation, has helped the company expand its U.S. market share from 26% in 2019 to 30% last year. The U.S. still accounts for almost half of Domino’s Pizza’s locations, so there is a tremendous opportunity outside the United States, where Domino’s Pizza has enjoyed 31 consecutive years of same-store sales growth.
The pizza maker’s business story is compelling, and its financials back it up. Domino’s is highly profitable and efficient with the capital it invests. So, even though sales have grown by just under 18% over the past five years, earnings per share have grown by over 38%. That’s the magic of a company that produces such a high return on invested capital (ROIC).
It also makes growth pretty durable. Wall Street analysts estimate that Domino’s Pizza will grow its earnings by an average of 10% to 11% annually over the next three to five years. The stock also pays a dividend with a yield of 1.7%, and management has raised the dividend for 12 consecutive years.
The stock’s current price-to-earnings ratio of 23.6 is near its decade-low, which may explain why Buffett, a notorious stickler for a good deal, continues to scoop up shares. As long as Domino’s Pizza can sustain the success it has had in years past, it’s hard not to like the stock’s long-term investment prospects.
Before you buy stock in Domino’s Pizza, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Domino’s Pizza wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $569,871!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,107,298!*
Now, it’s worth noting Stock Advisor’s total average return is 982% — a market-crushing outperformance compared to 185% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of November 17, 2025
American Express is an advertising partner of Motley Fool Money. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Domino’s Pizza. The Motley Fool has a disclosure policy.
Here’s the 1 Stock Warren Buffett Keeps Buying Despite Market Volatility was originally published by The Motley Fool