Comparing Domino’s and Papa John’s Dividend Policies

Dividends help smooth out return volatility for shareholders. Both Domino’s Pizza (DPZ) and Papa John’s (PZZA) have a strong history of returning cash to shareholders.

In 3Q16, Domino’s Pizza paid dividends of $0.38, which represents a growth of 22.6% from $0.31 in fiscal 3Q15. For the next four quarters, analysts expect Domino’s Pizza to post dividends of $1.60, which represents a growth of 14.5% from corresponding quarters of the previous year.

Papa John’s paid dividends of $0.20 in 3Q16, which represents a growth of 11.1%. For the next four quarters, analysts expect Papa John’s to post dividends of $0.82, which represents a growth of 10.8%. During 3Q16, Yum! Brands (YUM) paid dividends of $0.51, which represents a growth of 10.9% from $0.46 in 3Q15.

Apart from paying dividends, both Domino’s Pizza and Papa John’s reward shareholders with share repurchases or buybacks. During the last 12 months, Domino’s Pizza has repurchased shares worth approximately $883.9 million, and by the end of 3Q16, the company had approximately $165.5 million under its share repurchase program.

Papa John’s has repurchased shares worth approximately $149 million in the last 12 months, and by the end of 3Q16, the company had $95.9 million under its share repurchase program. Next, we’ll look at Domino’s and Papa John’s valuation multiples.