Why This Michigan-Based Company Could Be a Top Pick for Retail Investors

With a number of Michigan's top companies -- including Detroit automaker Ford Motor Company (NYSE: F), chemical company Dow Inc. (NYSE: DOW), and appliance maker Whirlpool (NYSE: WHR) -- undergoing recent slumps, it's good to see a homegrown Michigan business thriving. That business is Domino's Pizza (NASDAQ: DPZ).

Headquartered outside Ann Arbor, where approximately 6,500 of its employees work, Domino's claims to be the largest pizza company in the world, with thousands of franchises across the U.S. and in more than 90 international markets.

Here's why investments in this Michigan-based juggernaut could soon pay off for investors.

Image source: Getty Images.

Serving up extra-large growth

Despite being a mature company, Domino's has been consistently growing. Over the past 10 years, it has increased its number of U.S. stores, its international footprint, its revenue, its profits, and its dividend. Some of its strongest growth occurred during the pandemic lockdown era as people ordered food in instead of going out to eat. However, unlike many other U.S. companies, Domino's managed to hang onto its pandemic-era revenue gains in the post-lockdown era.

Over the last 10 years, annual revenue has climbed 119% to $4.8 billion, while net income has grown 206% to $589.5 million. Free-cash-flow growth has been lumpier, but still is up 176% over the past decade to $631.5 million. That free cash flow helps fund the company's dividend, which has increased for each of the last 12 consecutive years, including a 25% increase in 2024. Management is expected to boost the payout again for 2026.

Domino's growth has even outperformed the overall U.S. pizza industry. Its same-store sales grew 5.2% in the U.S. in the most recent quarter. Rival Papa John's only saw its same-store sales grow 1.6% in its most recent quarter, and Pizza Hut's same-store sales actually declined by roughly 1% during the same period.

But Domino's isn't resting on its laurels. Earlier this month, the company unveiled a brand refresh -- its first in 13 years -- featuring a new logo, employee uniforms, pizza boxes, and signage. The chain even rolled out a short three-second jingle ("Dom-mmm!-mino's") by music artist Shaboozey, which is the first time the company has had a jingle in its 65-year history. Management has also indicated a willingness to offer deals to drive orders, like the "Best Deal Ever" that helped drive traffic in Q2.

Bang for the buck

Domino's is poised to succeed in a world where value-conscious consumers are looking to cut their budgets. A large Domino's pizza will feed a family of four, and currently costs $9.99 in many markets (including in Michigan). That's roughly the same cost as a McDonald's (NYSE: MCD) quarter-pounder extra value meal, which, of course, only feeds one person. It's hard to find any restaurant that can compete with Domino's on sheer volume of food for the money. And, of course, pizza is usually appealing to even the most finicky of eaters, making it an easy and popular choice for families.

Recent earnings results from various restaurant chains seem to bolster the thesis that restaurant customers are prioritizing value at present. Sit-down restaurant Red Robin Gourmet Burgers (NASDAQ: RRGB) reported lower guest traffic in Q2, and predicted comparable sales would decline 3% to 4% in the second half of the year. Same-store sales at Chipotle Mexican Grill (NYSE: CMG) also slipped in Q2, by 4%. Meanwhile, comparable sales at McDonald's were up 2.5% in the U.S. If this trend continues in the near term, Domino's is likely to continue to benefit.

Even legendary investor Warren Buffett has apparently taken notice of Domino's strength in an uncertain economy. He's been loading up on shares of the pizza chain since Q3 2024 through his company Berkshire Hathaway (NYSE: BRK.B) (NYSE: BRK.A), amassing more than 2.6 million shares. In Q2 2025, Buffett increased Berkshire's stake even further, buying 13,255 additional shares, bringing Berkshire's total stake in the company to a value of nearly $1.2 billion.

With excellent growth prospects and a solid dividend currently yielding 1.6%, Domino's looks like a Michigan company that's worth an investment.

John Bromels has positions in Berkshire Hathaway, Chipotle Mexican Grill, Dow, and Ford Motor Company. The Motley Fool has positions in and recommends Berkshire Hathaway, Chipotle Mexican Grill, and Domino's Pizza. The Motley Fool recommends Whirlpool and recommends the following options: short December 2025 $45 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.