Tide will turn...Domino's Pizza Enterprises Ltd (ASX:...

Tide will turn...

Domino's Pizza Enterprises Ltd (ASX: DMP)

Analysts at Goldman Sachs think that this pizza chain operator could be an ASX dividend stock to buy.

The broker has been very cautious on Domino's for some time. However, it finally believes that the tide is turning for the company. As a result, it has just upgraded its shares to a buy rating with a $42.20 price target. It commented:

We have a Buy rating on the stock, as we believe management's focus on franchisee profitability through closure of 80/20-30 locations in Japan/France will help to material improve the quality of the network and help franchisee profitability. With COGs inflation moderating and the company focusing on execution of quality stores, we expect that store growth will be restored following a digestion period. DMP is trading at an undemanding PE valuation relative to its LT average and as such we believe the stock now offers an attractive entry point.

As for dividends, Goldman is forecasting dividends per share of $1.07 in FY 2024, $1.29 in FY 2025, and then $1.56 in FY 2026. Based on the current Domino's share price of $33.61, this equates to dividend yields of 3.2%, 3.8%, and 4.65%, respectively.