2024-03-22 12:42:16 ET
Summary
- Chipotle and Domino's both have high-quality businesses.
- I don't like DPZ's debt load, and I don't like CMG's valuation.
- I think that at current prices, both will underperform the market.
- I rate both as a hold, and will wait for better prices.
Opener
Chipotle ( CMG ) and Domino's ( DPZ ) have been amazing compounders in the past. They possess qualities that every business owner would wish for: a strong brand, excellent service, significant market share, growth, high margins, and high returns on capital. However, despite their past performance, both companies are facing challenges for investors now. I don't see either of them as a good buy right now....
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For further details see:
Chipotle Versus Domino's Pizza: One Is Costly, The Other, Risky