Warren Buffett’s Berkshire Hathaway just dropped $550 million on Domino’s Pizza shares, and nobody saw it coming. The Oracle of Omaha snagged 1.28 million shares during a market dip, then upped the ante by 86.5% in Q4. With Domino’s digital orders at 85%, solid dividends, and plans to add 4,500 stores by 2028, Buffett’s betting big on pizza. This tasty investment might reveal more than just the billionaire’s lunch preferences.
Warren Buffett just ordered a slice of Domino’s – and it’s a $550 million one. Berkshire Hathaway scooped up 1.28 million shares of the pizza giant in Q3 2024, making it the company’s 19th largest holding. The Oracle of Omaha clearly knows his toppings, as Domino’s stock promptly jumped 8.5% year-to-date after the news broke.
Berkshire’s $550 million slice of Domino’s shows Buffett’s appetite for profitable businesses, sending the pizza giant’s stock soaring.
Talk about perfect timing. Buffett grabbed his piece of the pie during a dip from all-time highs, proving once again that he loves a good bargain. Berkshire has since increased its position by 86.5% in Q4 2024.
And Domino’s isn’t just any fast-food joint – it’s a tech-savvy pizza empire where 85% of orders come through digital channels. Take that, traditional pizzerias.
The numbers tell a tasty story. Domino’s has been cranking out dividend increases for 12 straight years, with a current yield of 1.47% and an annual payout of $6.96. Not too shabby for a company that started by slinging pizzas out of a single store. Their forward P/E ratio of 24.31 reflects a compelling valuation compared to historical averages. Like many sector-specific ETFs, this investment provides focused exposure to the growing food service industry.
Over the last decade, the stock has done something remarkable – it’s grown more than 40-fold. Yes, you read that right.
Looking ahead, Domino’s isn’t planning to slow down. Management expects 6% annual global retail sales growth through 2025, ramping up to 7%+ for 2026-2028. They’re aiming to expand from 21,000 locations to 25,500 by 2028, with a heavy focus on Asia and Europe. India and China? They’re practically begging for more pepperoni.
The franchise model is pure Buffett bait – high margins, low capital requirements, and steady royalty income.
Add in partnerships with Uber Eats and DoorDash, plus industry-leading digital technology, and you’ve got a recipe for long-term success. While competitors like Papa John’s and Pizza Hut watch their same-store sales slide, Domino’s keeps delivering growth.
Sure, $550 million might be pocket change in Berkshire’s $266 billion portfolio, but Buffett’s pizza play has already got the market’s attention.
Sometimes the simplest businesses make the best investments – even if they come in a cardboard box.
