To claim a annual income of $1,000 through dividends from owning shares of Domino's Pizza, approximately how many shares are necessary?
businesses can reward their investors by dispensing a portion of their earnings as dividends, and many investors take pleasure in receiving these payments. If you're on the prowl for enticing dividend-generating stocks to purchase currently, you might contemplate Domino's Pizza (DPZ dropping by 0.23%), which has amplified its payouts for a dozen consecutive years.
To amass $1,000 in annual dividends from Domino's Pizza, let's delve into the calculations.
Crunching the Numbers
At present, Domino's dishes out a quarterly dividend of $1.51 per share. While its board of directors has a history of escalating those payouts, reaching an astounding 600% growth since 2012, to err on the side of caution, we'll presume that these distributions will remain static going forward. That amounts to $6.04 per year.
By dividing $1,000 by $6.04, we compute approximately 166 shares. If we multiply this number by Domino's closing price of around $465 on Dec. 10, we derive an investment requirement of approximately $77,190.
Famous for its affordability, accessibility, and swift delivery, Domino's has persisted in expanding its restaurant portfolio at a measured pace despite its immense footprint.
Its same-store sales have grown consistently for an impressive 30 consecutive years and are projected to continue in 2024. Throughout its fiscal third quarter, which concluded on Sept. 8, comps swelled by 3% in U.S. markets and 0.8% internationally. However, its earnings growth marked a tapering off. Inflated by foreign exchange rate considerations, its operating income inched up by only 5.7%.
If you're chiefly hunting for a stock that promises a consistent income stream, you may find higher dividend yields than Domino's 1.3%. This slight edge over the 1.2% average yield of the S&P 500 - the benchmark large-cap index - may seem unimpressive. Yet, given Domino's modest 33% payout ratio, it retains ample room to elevate its dividend distributions further.
To achieve an annual dividend income of $1,000 from Domino's Pizza, you would need to purchase approximately 166 shares, considering the current quarterly dividend of $1.51 per share and a presumption of static payouts. However, the investment required to purchase these shares is quite substantial, amounting to around $77,190 at Domino's current closing price of around $465.
To seek a stock offering higher dividend yields than Domino's 1.3%, you might consider investing in other companies that surpass its 1.2% average yield compared to the S&P 500. Despite Domino's modest 33% payout ratio, its capacity to boost its dividend distributions further remains noteworthy.
