Domino’s Pizza Inc (DPZ) has increased its dividend per share by $1.00, or 14.3%, after reporting a 29% YoY rise in Q4 free cash flow and 31% in 2025. Value buyers are attracted to DPZ stock, which is up 2.6% today at $394.58 per share, potentially offering over 20% upside.

The company’s Q4 revenue rose 6.4% YoY to $1.54 billion, exceeding market expectations, with a 31.2% YoY increase in free cash flow. DPZ’s FCF margin in Q4 was 11.5%, up from 9.41% last year, indicating strong cash flow growth in 2025.

DPZ’s dividend per share saw a significant 14.3% increase, now at $1.99 per quarter and $7.96 annually. Based on historical yield averages, DPZ appears undervalued by at least 20%, with potential price targets of $476.65 using dividend yield analysis.

Analysts forecast DPZ’s 2026 revenue at $5.23 billion, implying a rise in free cash flow to $725.6 million. Using a 5.0% FCF yield, DPZ stock could see a 7.6% upside, with price targets at $424.57. Overall, DPZ is expected to see growth based on its strong FCF margins and dividend yield.

Investors can anticipate DPZ stock to increase over the next year, with price targets ranging from $425 to $477 per share, representing a 14% increase. Analysts also have higher price targets, with an average PT of $482.97. DPZ’s strong free cash flow and dividend results make it an attractive option for value investors.

Read more at Barchart: Domino’s Pizza Hikes Its Dividend By 14.3% After Free Cash Flow Rises 29%