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Domino's Remains the Pizza King Even After Its Earnings Miss

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With all the negative news regarding Papa John's Int'l, Inc. (NASDAQ: PZZA)'s CEO PZZA and Pizza Hut's continuous drag on Yum! Brands, Inc. (NYSE: YUM), it seems as if Domino's Pizza, Inc. (NYSE: DPZ) stock has a dominant stance amongst its pizza competitors.

Domino's Pizza stock has already soared more than 45 percent this year, and has rocketed nearly fivefold in the past five years. Although Domino's stock has been rallying, the news that it missed its Q2 revenue estimates sent shares lower Thursday.  But the stock was climbing again by Friday morning, and, considering the performances of Papa John's and Pizza Hut, it wouldn't be a surprise to investors if it keeps going.

For one, despite its revenue miss, Domino's tallied its 29th consecutive quarter of domestic same-store sales growth. Also, earnings beat estimates and improved about 40 percent annually.

Domino's has become one of the world's largest fast-food chains, with more than 14,800 stores in over 85 countries. It has become an international powerhouse while also keeping its domestic dominance.

Additionally, Domino's boasts its position as a leader of consumer trends. For example, it was one of the forerunners in the pizza industry when it built up its mobile and online ordering systems.

On the other hand, Pizza Hut has been a drag on Yum in recent years, to the point where some have been suggesting that Yum would be best served by shedding the pizza chain from its holdings.

Meanwhile, Papa John's has faced bad PR surrounding its now-former CEO John Schnatter, and its stock has been tumbling over the past year. Plus, sales are showing signs of a continued decline. CNBC's Jim Cramer went as far as to say that Papa John's is "falling apart" when compared with Domino's.

Though there is always the factor of uncertainty, and although Domino's stock has tumbled a bit due to missing Q2 revenue estimates, it appears to be the strongest option in the pizza business right now.

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Latest Ratings for DPZ

DateFirmActionFromTo
Oct 2018Maxim GroupMaintainsHoldHold
Oct 2018Wells FargoMaintainsMarket PerformMarket Perform
Aug 2018CitigroupMaintainsNeutralNeutral

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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