Domino’s Pizza Enterprises vs Guzman y Gomez: Which fast food stock offers better value?

Domino’s Pizza Enterprises vs Guzman y Gomez shares

If you’re hungry for fast food stocks on the ASX, Domino’s Pizza Enterprises Ltd (ASX: DMP) and Guzman y Gomez Ltd (ASX: GYG) are two tempting names. Both companies run sizeable quick-service restaurant networks with bold growth ambitions, but their shares come with very different price tags and outlooks. So, which looks better value today?

The case for Domino’s Pizza Enterprises

Domino’s Pizza Enterprises is Australia’s largest pizza chain, with operations spanning not just locally but across Europe and parts of Asia. According to its company profile, it controls the Domino’s brand in countries including Australia, New Zealand, Japan, Taiwan and several European nations. Domino’s has also extended its reach into Malaysia, Singapore and Cambodia as of its most recent public description.

On the numbers front, Domino’s is sitting on a $1.87 billion market cap and offers a dividend yield of 2.91%. That’s pretty solid for a fast food business, and investors have banked fully franked dividends in the past – though recent payments have not been franked. The company’s P/E ratio stands at 29.61, though its latest earnings per share (EPS) figure is negative at -1.418. That mismatch suggests the P/E may be based on an adjusted or forward measure rather than statutory profit. Note: Domino’s reported P/E ratio may be based on a different earnings measure than the EPS shown, so they appear inconsistent.

Year to date, Domino’s shares have slipped 3.2%. Its dividend history shows regular payments over many years, but recent dividends have switched from full franking to 0% franking. That may impact after-tax yield for local investors.

The case for Guzman y Gomez

Guzman y Gomez is a homegrown, Mexican-inspired fast food operator and franchisor. The company’s main focus is its growing Australian footprint, with an ambition (per its company profile) to expand toward 1,000 local stores over the next couple of decades. Internationally, it’s kept a footprint in Singapore and Japan but has exited the US market as of May 2026 to double down on core regions.

Guzman y Gomez sports a larger market cap at $2.57 billion and an impressive 18.2% year-to-date share price gain. Its P/E ratio comes in steep at 62.21, considerably higher than Domino’s. However, its latest EPS is positive at 0.404 and, notably for income-focused investors, its current dividend yield is 1.34% with 100% franking on all recent payouts.

The company paid its first dividends in 2026, including a final, interim, and special dividend, all fully franked. That means Guzman is a much newer name on the dividend scene, but every payout so far maximises franking credits, which provides extra value for some investors.

Valuation comparison

There are some clear contrasts in the numbers here, especially with respect to valuation and income:

A few things stand out to me:

• Guzman y Gomez trades at a much higher P/E, suggesting the market is pricing in faster expected growth (or perhaps factoring in its more recent profitability). Meanwhile, Domino’s posted a negative EPS but still carries a P/E ratio—so that headline multiple may not reflect underlying earnings as neatly as it seems.
• Domino’s currently offers a higher yield but with recent dividends not franked, whereas Guzman y Gomez’s yield is lower but fully franked, which can be a game-changer for Australian shareholders looking for tax-effective income.
• In terms of size, Guzman y Gomez is now the larger business by market cap.

Recent share price momentum

Comparing recent share price performance as at 2 October 2026:

• Domino’s Pizza Enterprises closed at $19.76 on 2 October 2026, down 3.2% year-to-date.
• Guzman y Gomez closed at $25.12 on 2 October 2026, up a whopping 18.2% year-to-date.
• Short-term movement reveals Domino’s shares have been relatively soft, while Guzman y Gomez has enjoyed recent positive momentum, with a more pronounced upward trend over the past few months.

Which is the better buy?

Personally, I’d lean toward Guzman y Gomez as the better value play today—despite its higher P/E ratio and lower stated yield. Guzman y Gomez is delivering positive earnings, fully franked dividends, and strong share price momentum—plus the market seems to be rewarding its clear growth strategy and recent profitability. The promise of future growth is being bid up, but that’s common with strong consumer brands gaining ground.

Domino’s, on the other hand, is offering a higher yield but has posted a recent loss, and its dividend franking has dried up. The negative EPS clouds the value of its headline P/E and puts question marks over near-term earnings recovery.

If growth and fully franked income are your priority, Guzman y Gomez looks like the fresher, more energetic pick to me. Domino’s might appeal as a recovery story if you believe strongly in its turnaround potential, but based on the numbers in front of me, my pick would be Guzman y Gomez.

The post Domino’s Pizza Enterprises vs Guzman y Gomez: Which fast food stock offers better value? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.