12 Best Restaurant Stocks to Buy According to Hedge Funds

7. Domino’s Pizza, Inc. (NASDAQ:DPZ)

Number of Hedge Fund Holders: 46

Domino’s Pizza, Inc. (NASDAQ:DPZ) is a franchise and restaurant operator with around 21,400 outlets throughout more than 90 international markets as of the end of 2024. In addition to royalties and marketing contributions from franchised stores, the company’s network of 25 domestic (and five Canadian) dough manufacturing and supply chain facilities, which centralize purchasing, preparation, and last-mile delivery for its US and Canadian restaurants, and sales of pizza, wings, salads, sandwiches, and desserts at company-owned stores are the main sources of revenue. The firm holds a dominant position in the global pizza industry, with total sales of around $19.2 billion in 2024. It is among the Best Restaurant Stocks.

Domino’s Pizza, Inc. (NASDAQ:DPZ) is well-positioned to withstand a harsh business climate due to its 85% digital sales mix, effective incentive program, and quickly expanding carryout business. Morningstar analysts believe the company’s long-term focus on protecting franchisee profits, strengthening its expanding carryout business, fortifying its tech infrastructure, and increasing store density at the market level is prudent, despite forecasting a difficult couple of quarters with signs of consumer trade-down and declining industrywide traffic.

Analyst Andrew Strelzik of BMO Capital maintained his Outperform rating on Domino’s Pizza, Inc. (NASDAQ:DPZ) shares and increased his price objective from $515 to $540. In a research note, the analyst informs investors that the company’s Q1 earnings are above expectations because of a stronger international comp, a gain on investment, lower G&A, and marginally higher supply chain profitability. The company sees multiple expansion potential as the business continues to be a compelling U.S. comp re-acceleration story with obvious sales drivers, BMO stated.