It’s 2010. You’re an eager investor presented a choice between two stocks: Google or Domino’s Pizza. Where do you put your money?
You should have gone with your gut.
In an incredible feat for a pizza company, Domino’s share price growth has outperformed all of the world’s largest tech companies so far this decade. An investment in Domino’s at the start of 2010 has grown by more than 2,000% to date, leaving the likes of Amazon, Google, Facebook, and Apple in the dust.
In fact, since Domino’s swapped its crappy old pizza recipe for a better-tasting one in late 2009, the fast-food chain has been killing it—rising by an order of magnitude more than the overall market:
Actually, compared with every stock listed in 2010 on the NYSE or Nasdaq of a decent size—a current market cap of $1 billion or more, a universe of nearly 2,300 companies—Domino’s performance since 2010 beats all but three of them. (You can check out the top 50 at the end of this article.) The pizza chain is topped only by two medical companies (Accelerate Diagnostics and Acadia Pharmaceuticals) and Patrick Industries, a furniture and building materials group.
So what gives?
Domino’s will tell you that the answer is more complex than dough—part of a “longer story arc” of many changes and improvements from over the years. But there’s no doubt the company began its turnaround when it finally admitted to itself—and the world—that it was guilty of selling a bad product. They confessed as much in a December 2009 ad:
For years, Domino’s excelled not at high-quality pizza, but in getting low-quality pizza to customers quickly. Most of its ingredients were canned, frozen, or pre-made, making it easy to toss together a sub-par pie. But being quick only carries so much charm. The company’s pizza gained a reputation for its cardboard-like consistency, and in one taste test was described as being on par with pies served at Chuck E. Cheese. (Food prepared for eight-year-olds’ birthday parties does not set a very high bar.)
Fast-forward seven years and Domino’s has a market cap of around $9 billion, propelled by its new pizza recipe and menu items such as chicken wings and salads.
There’s only one other consumer-facing company that’s performed about as well as Domino’s in recent years, and it sort of makes sense. Think about it. What is a person most likely doing while chowing down on home-delivered pizza? Possibly binging on Netflix:
Correlation? We’ll leave that one to the financial analysts.
Top 50 NYSE/Nasdaq companies (with current market cap >$1bn) ranked by share price growth since Jan. 1, 2010:
|Company||Price change (%)|
|Nexstar Media Group||1,583|
|Western Alliance Bancorporation||1,244|
|Silicon Motion Technology||1,220|
|Taro Pharmaceutical Industries||1,178|
|Pacific Premier Bancorp||1,045|
|Wabash National Corporation||1,003|
|Alaska Air Group||997|
|Constellation Brands (Class A)||920|
|Constellation Brands (Class B)||919|
|Sinclair Broadcast Group||890|
|Popeyes Louisiana Kitchen||868|
|Texas Pacific Land Trust||839|
|Acadia Healthcare Company||802|
|Sirius XM Holdings||785|
|Ligand Pharmaceuticals Incorporated||736|
|China Biologic Products||727|