Domino’s Pizza, Inc. (DPZ), Papa John’s Int’l, Inc. (PZZA), Yum! Brands, Inc. (YUM): Why This Pizza Stock is the Obvious Choice?

Even though the company lacks humongous international presence, this data surely conveys its herculean power in the U.S., and I think that this lack of wide presence is more of a growth opportunity than a negative point. Papa John’s Int’l, Inc. (NASDAQ:PZZA) consistent record for delivering strong results and a ton of opportunities ahead make it a ripe investment.

Yum! Brands does have some problems

Yum! Brands, Inc. (NYSE:YUM), the holding company of popular brands like KFC and Pizza Hut has been facing constant issues with its KFC brand in China. The media in the region has tainted the brand for using illegal drugs for fattening chickens as well as other allegations. While Yum! Brands, Inc. (NYSE:YUM) has made all efforts to meet quality standards in order to sustain growth in this key market, it has limped on ever since the first allegation. Yum! Brands, Inc. (NYSE:YUM) has also not been the best investment for investors as it churned out total returns of just 11.8% over the last year compared to the S&P 500’s total return of 24.7%.

Apart from low returns, another downside to this stock is volatility. A look at its share price movement reveals a high frequency of swings in the last 12 months with a net capital appreciation of just 11%. Thus, an investor is better off investing in a stable dividend-paying stock like Domino’s rather than Yum! Brands, Inc. (NYSE:YUM)

Domino’s is the obvious choice
A few months back I read an article  on how the CEO of Domino’s India franchise designed the entire delivery system in order to deliver pizzas efficiently and without violating the legislation of the country. It is this planning and dedication that has helped this company in becoming the pizza delivery champion across the globe. This title that Domino’s has earned is a huge advantage that will continue to pay off handsomely in the future.

To conclude, I am not asking investors to disregard certain concerns over the financial health of the company or the challenges it is facing in big markets. Domino’s Pizza, Inc. (NYSE:DPZ) is a fundamentally strong company that has effectively tackled competition to sustain value for shareholders, which is the primary reason that one should take a harder look at it as an investment in this industry.

The article Why This Pizza Stock is the Obvious Choice? originally appeared on Fool.com and is written by Mihir Mehta, Mehta.

Mihir Mehta has no position in any stocks mentioned. The Motley Fool owns shares of Papa John’s International (NASDAQ:PZZA).

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.