The below-mentioned 2 stocks have witnessed a significant rise in their returns towards long term fund providers in the past three years. The ROE & ROIC of A2M has risen at an average rate of 31.43% and 31.38%, while the same for DMP has risen at an average rate of 26.3% & 12.8% respectively, Let’s take a closer at these stocks-
The a2 Milk Company Limited (ASX: A2M)
The a2 Milk Company Limited (ASX: A2M) produces cow milk which is free of a protein called beta casein A1. The Company distributes in Australia, New Zealand, China, Hong Kong, Singapore, the United States, and the United Kingdom.
The company had lately informed the forming of two new positions. Melanie Kansil will join the company as a Chief Commercial Officer in the 1H FY19. Also, Phil Rybinski has been appointed for the role of CTO, effective from April 2019. Both officials join the firm with substantial and diverse experience across a range of consumer-driven industries.
The company expects that rapid growth would continue, however at a reasonable rate as compared to the first four months of FY2019. This would be on account of the rising consumer demand for healthcare and wellness products & positive regulatory outlook. The growth is also expected to be on the back of the food safety standards being elevated as well as traction towards organic products.
For FY 2018, the company registered revenue of NZ$922.70 million, up by a stellar 68% on a YoY basis. This was achieved on account of the impressive sales of “a2 platinum” infant formula across Australia and China along with a constant increase in the market share.
Gross margins improved over the year and were recorded at the NZ$464.30 million up from the previous $263.50 million, registering a change of more than 76% on a YoY basis. This was on account of the better product mix with an increased proportion of infant formula sales as well as favourable foreign currency movements and improving net selling prices.
Thus, considering the impressive sales of “a2 platinum” & growing traction towards organic products, Investors can keep a close look at this stock.
The stock is currently trading at a price of $14.10, up by 3.372% during the day’s trade with a market capitalisation of ~$10 Bn. The stock has provided a YTD return of 31.15% & also posted returns of 36.81%, 40.91% & 16.09% over the past six months, three & one-months period respectively.
Domino's Pizza Enterprises Limited (ASX: DMP)
Domino's Pizza Enterprises Limited (ASX: DMP) is a franchisee of the Domino's Pizza. The Company operates into the quick service restaurant segment within fast food retail.
The company has lately announced that it has intentions to go on with an on-market share buy-back of shares. The buy-back is one of the verticals of the management's capital management strategy and this buy-back shall be funded from existing or new debt facilities. The Company will conduct the buy-back within the 10/12 limit under the Corporations Act. The buy-back period is expected to commence in the week starting 7 January 2019 and end on 31 December 2019.
The Company will buy back shares at such times and in such circumstances as are considered beneficial to the efficient capital management of the Company and accordingly has not pre-determined a maximum number of shares that it intends to buy back or total amount that it will pay under the buy-back.
For FY18, the company continued to deliver growth for its shareholders, with another strong performance in 2018. Across seven countries, sales increased by 11.7% to $2.59 billion. This delivered revenue 7.5% higher at $1.15 billion, and earnings before interest and taxation of $205.9 million, 10.9% higher than the prior year. Net profit after tax was 15% higher, at $136.2 million.
The company built 145 new stores during the 2018 financial year– and acquired 163 stores in Germany as part of the Hallo Pizza acquisition.
As mentioned, network sales increased by 11.7%. Within network sales, online sales increased by 19.4%, as its teams worked every day to deliver the best customer experience, from ordering through to receiving their quality meal quickly. The management of the company is pleased to advise that free cash flow during this period more than doubled, to $120.6 million.
Domino’s Pizza Enterprises paid a final dividend of 49.7 cents per share (75% franked), taking the total dividend for the year to 107.8 cents per share, 15.5% higher than the previous financial year.
The stock is currently trading at a price of $44.41, down by 0.202% during the day’s trade with a market capitalisation of ~$ 3.81 Bn. The stock has provided a YTD return of 9.34% & also posted returns of -19.25%, -5.98% & 1.76% over the past six months, three months & one-month period respectively.
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