CEC Entertainment (NYSE: CEC) and Domino’s Pizza (NYSE:DPZ) are both cyclical consumer goods & services companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Insider and Institutional Ownership

94.2% of Domino’s Pizza shares are held by institutional investors. 3.6% of Domino’s Pizza shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares CEC Entertainment and Domino’s Pizza’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CEC Entertainment N/A N/A N/A $2.73 N/A
Domino’s Pizza $2.47 billion 3.23 $214.67 million $5.24 34.87

Domino’s Pizza has higher revenue and earnings than CEC Entertainment. CEC Entertainment is trading at a lower price-to-earnings ratio than Domino’s Pizza, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CEC Entertainment and Domino’s Pizza’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CEC Entertainment N/A N/A N/A
Domino’s Pizza 9.47% -12.59% 34.19%

Analyst Recommendations

This is a breakdown of recent ratings for CEC Entertainment and Domino’s Pizza, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CEC Entertainment 0 0 0 0 N/A
Domino’s Pizza 0 9 10 0 2.53

Domino’s Pizza has a consensus target price of $206.90, indicating a potential upside of 13.23%.

Volatility and Risk

CEC Entertainment has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Domino’s Pizza has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Dividends

Domino’s Pizza pays an annual dividend of $1.84 per share and has a dividend yield of 1.0%. CEC Entertainment does not pay a dividend. Domino’s Pizza pays out 35.1% of its earnings in the form of a dividend. Domino’s Pizza has increased its dividend for 3 consecutive years.

Summary

Domino’s Pizza beats CEC Entertainment on 9 of the 12 factors compared between the two stocks.

CEC Entertainment Company Profile

CEC Entertainment, Inc. is engaged in the family dining and entertainment center business. The Company develops, operates and franchises family dining and entertainment centers under the name Chuck E. Cheese’s. Chuck E. Cheese’s stores feature musical and comic entertainment by robotic and animated characters, arcade-style and skill-oriented games, video games, rides and other activities. All of its stores offer dining selections consisting of a range of beverages, pizzas, sandwiches, appetizers, a salad bar and desserts. As of January 1, 2012, the Company and its franchisees operated a total of 556 Chuck E. Cheese’s stores. As of January 1, 2012, it operated 507 Company-owned Chuck E. Cheese’s stores located in 44 states and Canada and its franchisees operated a total of 49 stores located in 15 states, Puerto Rico, Guam, Guatemala, Chile, Saudi Arabia and the United Arab Emirates. In February 2014, Apollo Global Management, LLC completed the acquisition of CEC Entertainment Inc.

Domino’s Pizza Company Profile

Domino’s Pizza, Inc. is a pizza restaurant chain company. As of January 1, 2017, the Company operated in over 13,800 locations in over 85 markets around the world. The Company operates through three segments: domestic stores, international franchise and supply chain. Its basic menu features pizza products in various sizes and crust types. As of January 1, 2017, its Domestic Stores segment consisted primarily of its franchise operations, which consisted of 4,979 franchised stores located in the contiguous United States. As of January 1, 2017, its International Franchise segment consisted of a network of franchised stores in over 85 international markets. As of January 1, 2017, its supply chain segment operated 18 regional dough manufacturing and food supply chain centers in the United States, one thin crust manufacturing center, one vegetable processing center and one center providing equipment and supplies to certain of its domestic and international stores.

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