Berkshire’s $1.4B Bet: DPZ Looks Poised to Expand Market Share

Key Points

• Berkshire Hathaway is a huge shareholder of Domino’s Pizza; the company’s expanding market share is almost surely a key reason why.
• Domino’s shares got a solid lift after the company’s last earnings report, music to Warren Buffett’s ears.
• Domino’s not only provides a solid dividend, but has been growing its payment briskly for years.

While shares of Domino’s Pizza NASDAQ: DPZ have not performed well over recent years, the firm has backing from arguably the most famous investment company in the world. Domino's isn’t a long-time holding of Warren Buffett’s Berkshire Hathaway NYSE: BRK.B, but it isn’t a completely new one either. The firm first initiated a position in DPZ back in Q3 2024, purchasing 1.28 million shares. And, as astute investors do when a stock that they have strong conviction in drops, Berkshire has bought millions more shares since.

From the beginning of Q3 2024 to late February, Domino's shares have fallen by over 20%.  Accordingly, as of Q4 2025, the Berkshire position is now over 3.35 million DPZ shares, an increase of over 150% since inception. In total, Berkshire owns just under 10% of Domino’s shares, making it the company’s second largest shareholder. The position accounts for around 0.5% of Berkshire’s total portfolio, and is worth almost $1.4 billion.

Overall, Berkshire’s significant position and its willingness to buy the dips in Domino's stock are clear indications of its confidence in this name. Given this, Domino's is a stock worth examining after its latest earnings report.

DPZ Posts Mixed Q4, Shares Gain

Domino’s put up a Q4 2025 earnings report that impressed markets, with shares of the consumer discretionary company rising around 4% in response.

Domino's posted revenue of $1.54 billion, a slightly more than 6% year-over-year increase. This figure surpassed the consensus estimate of $1.52 billion. The firm’s adjusted earnings per share (EPS) grew by over 9% to $5.35. This just barely missed estimates of $5.38.

Looking into 2026, Domino’s expects to grow global sales by around 6%. This indicates a slight acceleration versus global retail sales growth of 5.4% in 2025.

Market Share Leader with Expansion in Sight

Domino’s has the leading U.S. market share among fast-food pizza chains, with Pizza Hut (a Yum! Brands NYSE: YUM subsidiary) as its biggest rival.

Market share is best tracked using retail/system sales—total sales across company-owned and franchised stores—rather than reported revenue, since franchisees own most locations and the parent company only keeps a slice of those sales.

In 2024, Domino’s generated U.S. retail sales of $9.5 billion, vastly exceeding Pizza Hut’s $5.5 billion in system sales. In 2025, the company grew its lead against Pizza Hut considerably. DPZ’s full-year U.S. retail sales came in at around $9.95 billion, compared to Pizza Hut’s approximately $5.11 billion of system sales. Domino’s U.S. sales rose 4.7% over the full year, while Pizza Hut’s fell 8%.

To add insult to injury, Yum! expects to close 250 U.S. Pizza Hut locations in 2026. Meanwhile, Domino's plans to open 175 or more new stores in the United States. This gives Domino’s a strong opportunity to continue taking share from Pizza Hut. Notably, Yum! has also begun a “strategic review” of Pizza Hut, a move that often indicates concern around a brand’s performance and trajectory. Strategic reviews can even lead to a company selling a brand.

Domino's is a market share leader and has a real opportunity to continue growing its lead from its already strong position. Furthermore, the threat of new entrants is somewhat limited by the fragmented nature of the pizza industry. Aside from the big quick-service players, much of the industry centers around mom-and-pop establishments. Domino’s economies of scale make it very difficult for these dispersed stores to compete on price.

Prolific Dividend Grower Trading at Discount Versus History

With Domino’s holding a strong position in its market and its top competitor showing weakness, Berkshire’s bullish stance carries real weight. The stock shows signs of undervaluation, trading at a forward price-to-earnings (P/E) ratio of 21.5x. This is around 16% below its three-year average forward P/E of 25.7x.

Domino's also provides a bit of income juice for investors. Alongside its earnings release, Domino's announced a very strong 15% increase to its quarterly dividend. This moves its quarterly dividend up to $1.99, providing the stock with a meaningful dividend yield of approximately 2%. Although not sky-high, this yield is considerably above the 1.1% offered by the S&P 500 Index.

Domino’s has grown its dividend by an impressive 18% compound annual rate over the past five years. This is a claim that only a small portion of U.S. large-cap stocks can make. The company will pay its next dividend on March 30 to shareholders of record as of the March 13 close.