Each investor has their own strategy — some aim to lock in low prices while others want to earn steady income.
Value investors hunt for shares that look cheap versus their earnings and assets, while income investors focus on dividends that seem sustainable and ideally growing over time.
Every now and again, a FTSE share comes along with the potential to meet both criteria. That’s hard to ignore.
But cheap doesn’t always mean good value, so first we need to understand why a price is where it is.
Why is the share price so low?
Trading at around 189p, Domino’s Pizza Group (LSE: DOM) shares are well below the past year’s high of 257p and close to the 52‑week low of 164p. That’s quite a fall for a brand that still holds the clear number-one spot for pizza delivery in the UK.
When zooming out on the price chart, I see that the shares are near their lowest level in more than a decade. Naturally, that caught my attention — so what’s going on?
The cost‑of‑living squeeze has pushed many households towards cheaper home‑cooked meals and discount retailers, so occasional treats like takeaway pizza have faced pressure. I also suspect some investors worry that these habits could stick even as inflation eases and wages recover.
Once people have seen the benefits of tight budgeting, how easily will they go back to blowing £20 or more on one pizza night?
Tastes are shifting too. Younger consumers are more health conscious, preferring high-protein, low-fat and fresh ingredients. And the takeaway landscape’s changing to meet this demand.
To its credit, Domino’s is trying to keep up, with launches such as CHICK ’N’ DIP and the new Italianos thin‑crust pizza range.
But the risk remains — if economic pressures and changing tastes don’t ease, today’s ‘cheap’ valuation could stay cheap for a long time.
What do the numbers say?
However, the latest Q1 2026 trading statement looks encouraging:
- Total system sales up 5.8% year on year.
- Like‑for‑like sales up 4.5%.
- Total orders rose 2.3%.
- Net margin: 8.55%.
CEO Nicola Frampton said: “We have carried the positive momentum seen at the end of 2025 into 2026, with trading performing in line with our expectations.”
Management also highlighted that many key input costs are hedged through this year and partly into 2027, helping reduce the risk of another margin shock.
So is it good value?
Domino’s shares trade on a price-to-earnings (P/E) ratio of just 12.48 and the dividend yield sits just over 6%, with a payout ratio close to 74%.
In short, it’s a cheaper-than-average stock paying above-average dividends that are covered by profits. Analysts on average, expect the price to reach 270p in the coming 12 months, implying roughly 44.2% growth from today’s level. Not bad.
But changing consumer tastes and a still‑fragile UK economy could all hold the shares back for longer than we’d like. For that reason, I’d say it’s worth considering only as a small (2%-3%) allocation within a diversified portfolio. A larger position could lock-up capital in a value trap for a long time.
If the outlook improves, the position can always be increased gradually once a genuine recovery kicks in. Meanwhile, there’s another high-yielder that looks even more appealing to me right now…
What income stock do we like better than Domino's Pizza Group Plc right now?
One of our Share Advisor analysts has just released a brand new stock report that we think is a must-read for any investor looking to try and generate potential income.
And the best bit is that you can see if for yourself, right now, absolutely free of charge!
No jargon. No hard sell. Just a clear look at an income share we think is worth your time.
Mark Hartley does not hold any positions in the companies mentioned.
