Stock of the Day

Sysco (SYY)

$74.19

+$0.42 (+0.6%)

Market Cap: $35.96B

About Sysco

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally.

It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen food, such as meat, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry food products; fresh meat and seafood products; dairy products; beverages; imported specialties; and fresh produce products. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of glassware and silverware; cookware, such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.

Sysco Bull Case

Here are some ways that investors could benefit from investing in Sysco Co.:

• Sysco Co. recently reported earnings per share of $0.96, which, while slightly below analysts' expectations, indicates stability in earnings compared to the same period last year.
• The company has a strong return on equity of over 106%, suggesting effective management and profitability relative to shareholder equity.
• Sysco Co. has increased its quarterly dividend to $0.54, reflecting a commitment to returning value to shareholders, with an annualized yield of approximately 2.96%.
• The current stock price is around $73.73, which may present a buying opportunity for investors looking for growth in the foodservice distribution sector.
• Revenue for the latest quarter was $19.60 billion, showing a year-over-year increase, indicating potential for continued growth in the foodservice market.

Sysco Bear Case

Investors should be bearish about investing in Sysco Co. for these reasons:

• The company missed analysts' revenue estimates by approximately $0.51 billion, which may raise concerns about future growth and market competitiveness.
• Despite a year-over-year revenue increase, the net margin is relatively low at 2.40%, suggesting that profitability could be a concern in a competitive market.
• Sysco Co. has a dividend payout ratio of nearly 56%, which may limit its ability to reinvest in growth opportunities or weather economic downturns.
• Recent trading activity shows fluctuations in share price, which could indicate volatility and uncertainty in investor sentiment.
• Institutional investors hold a significant portion of Sysco Co.'s stock, which can lead to increased volatility if large shareholders decide to sell.

Recent News

• 3 Undervalued Dividend Kings Bouncing Off Their 52-Week Lows (msn.com)
• Sysco Corporation (SYY) dbAccess Global Consumer Conference (Transcript) (seekingalpha.com)