Pizza stocks haven’t been nearly as hot as they were during the pandemic’s lockdown days. Undoubtedly, it’s not hard to imagine many folks got a bit sick of pizza during lockdowns. Fast forward to today, and many of the top pizza plays have endured a painful fall off their highs.
As consumers get a taste for pizza again, I view the pizza plays as very intriguing buys on the recent dip. Their delivery capabilities are up to speed. And even as a recession approaches at some point over the next few quarters, I continue to view pizza as a relatively affordable and tasty option to feed a rather sizeable group of people.
So, without further ado, let’s have a peek at two pizza stocks with strong, well-supported dividends.
Domino’s Pizza
First, we have Domino’s Pizza (NYSE:DPZ), which is currently in recovery mode after a 47% peak-to-trough fall. Indeed, the pandemic tailwind days may be over, but consumers clearly still have a taste for pizza, as evidenced by the remarkable 29% pop in the stock since its June lows. I think the recent momentum could be the start of a sustainable move toward highs not seen since late 2021.
The company expects to expand by a considerable amount (hitting 5,000 stores by fiscal 2029) over the next few years. As it does, I think it’ll be tough to bet against shares of DPZ. Today, the stock goes for 28.9 times trailing price to earnings. That’s not too high a price to pay for growth.
The dividend yield sits at 1.27%. It’s not the highest yield of the pizza plays, but one that has a runway for growth! If you’re a fan of Domino’s Pizza, why not give its stock a try?
Pizza Pizza Royalty
Pizza Pizza Royalty (TSX: PZA) stands out as a cheaper and more bountiful pizza stock. Though it may not be as growthy as the likes of Domino’s, I still think the shares have a lot to offer at these modest multiples. The stock has been in rally mode since bottoming in March 2020. Despite the nice multi-year run, shares are still 17% off all-time highs just shy of $18 per share. I think it’s just a matter of time before new highs are met.
The 6.13% yield is juicy. It’s safe and could grow at a decent pace, as Pizza Pizza continues to tout its impressive value proposition. Indeed, Pizza Pizza offers a magnificent value for money. As a recession hits, one has to imagine Pizza Pizza could gain a bit of share from rivals in its markets of operation. In that regard, Pizza Pizza is not only a bountiful play — it’s a more defensive one.
The Foolish bottom line
Pizza stocks are really heating up again. I think they could get even hotter, regardless of whether a downturn rocks the economy over the next few years. Between Domino’s and Pizza Pizza, I have to go with the latter. Why? The yield is too good to pass up, as too is the value proposition ahead of what could be a consumer slowdown.
