The previous yr has taken a slice out of the share price of Domino’s Pizza Group (LSE: DOM). The FTSE 250 share is now 18% beneath the place it stood 12 months in the past.

That implies that it trades on a price-to-earnings (P/E) ratio of 11. That’s lower than half the P/E ratio of New York-listed Domino’s Pizza Inc.

The US enterprise mannequin is completely different, because it makes cash franchising the model, whereas Domino’s Pizza is solely a neighborhood franchisee. However the UK enterprise is performing a lot better than the constantly loss-making jap European franchisee, London-listed penny share DP Poland.

It additionally gives a 4.2% yield, above the three.6% common for FTSE 250 shares.

May this be a cut price share so as to add to my portfolio?

Heaps to love about Domino’s

Whereas the share price motion suggests the enterprise could also be going through harder occasions than earlier than, I’m much less positive about that.

Within the first quarter, complete orders had been larger yr on yr and like-for-like gross sales additionally grew. The expansion was modest, however I nonetheless see it as optimistic.

Final yr’s figures additionally didn’t comprise apparent trigger for alarm, for my part. Sure, revenues slipped barely. However underlying revenue earlier than tax grew 8.4%.

In contrast, statutory revenue after tax was down by over a fifth. Nonetheless, the prior yr’s (2023) determine had been enlarged by the sale of a German affiliate. Final yr’s quantity was 11% forward of the 2022 equal. I see that as stable progress.

Certainly, one thing I like about Domino’s is its robust profitability. Final yr’s statutory revenue after tax of £90m on income of £665m equates to a web revenue margin of 13.6%.

Some watchouts for buyers

Nonetheless, there are some considerations I’ve concerning the funding case.

Internet debt grew final yr to £266m. That could be a little over 1 / 4 of the present market capitalisation. I see that as manageable however would like a decrease debt degree, as curiosity prices eat into income.

Larger workers prices are additionally a danger to income throughout the meals trade this yr and Domino’s is not any exception.

Attainable cut price

Nonetheless, even weighing a few of these danger components, the present share price of this well-known FTSE 250 model nonetheless seems to be low cost to me.

Buyer demand is resilient and the model is a robust one. The enterprise mannequin is confirmed and generates juicy revenue margins. The corporate is scaling up, which is including extra economies by spreading prices wider.

I reckon the Domino’s enterprise is a stable one that also has sizeable progress potential. It’s throwing off money and appears set to maintain doing so. The dividend yield is engaging to me and the dividend per share has been rising.

All issues thought of, if I had spare cash to take a position in the intervening time I’d be completely satisfied to tuck this FTSE 250 share into my portfolio.