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SYY

Sysco NYSE:SYY Stock Report

Last Price

US$82.26

Market Cap

US$41.8b

7D

-4.7%

1Y

4.4%

Updated

11 Aug, 2022

Data

Company Financials +
SYY fundamental analysis
Snowflake Score
Valuation4/6
Future Growth3/6
Past Performance3/6
Financial Health2/6
Dividends5/6

SYY Stock Overview

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

Sysco Corporation Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Sysco
Historical stock prices
Current Share PriceUS$82.26
52 Week HighUS$91.53
52 Week LowUS$68.05
Beta1.01
1 Month Change-4.78%
3 Month Change-2.92%
1 Year Change4.42%
3 Year Change13.86%
5 Year Change60.70%
Change since IPO1,909.41%

Recent News & Updates

Aug 08

Sysco Q4 2022 Earnings Preview

Sysco (NYSE:SYY) is scheduled to announce Q4 earnings results on Tuesday, August 9th, before market open. The consensus EPS Estimate is $1.11 (+56.3% Y/Y) and the consensus Revenue Estimate is $18.29B (+13.3% Y/Y). Over the last 2 years, SYY has beaten EPS estimates 63% of the time and has beaten revenue estimates 50% of the time. Over the last 3 months, EPS estimates have seen 11 upward revisions and 3 downward. Revenue estimates have seen 10 upward revisions and 1 downward.

Jul 25

Sysco Is Thriving In This Tough Inflationary Environment

US food service distributor Sysco is one of the few stocks that has gone up significantly year to date. As restaurants seek efficiencies in this inflationary environment, they are increasingly turning to Sysco. Sysco's competitive moat, cost advantage, and growth strategy are delivering significant market share gains. Shares are far from being a bargain, but we believe the valuation is justified by the expected growth. US food service distributor Sysco (SYY) is one of the few stocks that has gone up significantly year to date. One of the reasons is that the current inflationary environment is making restaurants and other "food away from home" businesses search for efficiencies to compensate as much as possible for price increases. This is where Sysco's cost advantages come into play, since thanks to its scale it can offer better prices than competitors. Sysco is leveraging these cost and efficiency advantages to gain market share, and it has been successful so far. For example, in the US Sysco has ~17% market share of these fragmented $300 billion food distribution industry, up a full point y/y reflecting the strong market share gains. Data by YCharts Sysco has a competitive moat thanks to its cost advantages. The company benefits from lower distribution cost given its closer proximity to customers, complemented by scale-enabled cost advantages such as purchasing power. Further strengthening its competitive moat, Sysco is aiming to become even more efficient. It has a plan to increase efficiency with a $750 million of cost-out targets to be achieved between FY21 and FY24. Reinvesting the savings into better prices and services for customers should allow Sysco to grow 1.5 times faster than the overall food-service market by fiscal 2024, according to the company. If it was already difficult to compete with Sysco, it is going to become even harder as the company makes enormous efforts like this one to become more efficient, despite already being incredibly efficient thanks to its massive scale. Sysco has more than 650,000 customers, 343 distribution facilities, 58,0000 associates, and 7,000 sales consultants. This is why some refer to Sysco as the backbone of the food-away-from-home industry. Current Environment Covid created a very challenging environment for Sysco, with people eating a lot more at home, and its restaurant customers struggling. Since then, however, the US food service market has fully recovered, with volumes exceeding pre-pandemic levels, and Sysco coming out of the crisis with a 10% increase in independent restaurant customers. Now food service is once again gaining share versus grocery stores, what had been a very long term trend is now continuing. Sysco Investor Presentation Interestingly, it is grocery store food prices where inflation is running hotter, with menu prices rising at more modest rates. This helps restaurants remain competitive in this complicated environment of high inflation and a weakening purchasing power for consumers. The fact that restaurants are becoming increasingly competitive is great news for Sysco, as it means the share of food-away-from-home will continue expanding. Sysco Investor Presentation Financials One thing we can see from the margins is that food distribution is a tough business where small efficiency advantages can make a huge difference. At least margins tend to be relatively stable, with operating margins close to the 3.1% average of the last ten years, with the exception of the Covid crisis, where they had a big dip as expected. Data by YCharts Despite the tough margins, Sysco is not a bad business. It has delivered excellent returns on capital employed, with a ~15.5% average over the last ten years. This is a quality business, but one that requires high efficiency and scale advantages to be successful. Data by YCharts Growth Going forward Sysco expects to grow 1.5x faster than the total market from now to the end of fiscal 2024. This should be enabled by the reinvesting of efficiency gains into more competitive pricing and even better service to customers. For example, Sysco is launching teams that specialize in various cuisines (Italian, Asian, Mexican) that should drive market share gains in ethnic restaurants. Sysco also has a new leadership team in place for its international operations. This market share gains should translate to significant sales and EPS growth. By 2024 Sysco expects that EPS will exceed pre-Covid all-time high EPS by more than 30%. The growth in earnings per share should also drive higher dividend increases, which have been growing for 52 consecutive years, giving the company a dividend aristocrat status. Sysco Investor Presentation Balance Sheet Sysco does carry a significant amount of debt on its balance sheet, with ~$11 billion in total long-term debt, and about $876 million in cash and short term investments. Data by YCharts Leverage has been coming down, it spiked mostly due to the profitability impact that the Covid crisis had, but remains high at a ~3.7x debt/EBITDA. The company has said that it remains committed to a strong investment grade credit rating, and it is targeting a net leverage ratio of 2.5x to 2.75x net debt to adjusted EBITDA, so it still has some work to do, but we do believe it will get there. Data by YCharts Valuation At an EV/EBITDA ratio of ~17.7x shares are trading above the ten year average of ~15.5x, but given the share gains the company is currently delivering we do not think this is completely unreasonable. In fact the forward EV/EBITDA is below the ten year average at ~13x. This gives us the impression that shares are fairly valued. Data by YCharts The current dividend yield of ~2.1% is a little below the ten year average of ~2.6%. The company does a lot of buying back of its own shares, which means the net common payout yield is above the dividend yield. Combining net buyback yield and dividend yield, shares currently have a net common payout yield of ~3.1%, which is not bad but below its historical average of almost 5.5%.

Jun 18
Sysco (NYSE:SYY) Has Some Way To Go To Become A Multi-Bagger

Sysco (NYSE:SYY) Has Some Way To Go To Become A Multi-Bagger

If you're looking for a multi-bagger, there's a few things to keep an eye out for. Ideally, a business will show two...

Shareholder Returns

SYYUS Consumer RetailingUS Market
7D-4.7%0.9%1.3%
1Y4.4%-2.1%-11.7%

Return vs Industry: SYY exceeded the US Consumer Retailing industry which returned -2.2% over the past year.

Return vs Market: SYY exceeded the US Market which returned -11.6% over the past year.

Price Volatility

Is SYY's price volatile compared to industry and market?
SYY volatility
SYY Average Weekly Movement4.5%
Consumer Retailing Industry Average Movement6.1%
Market Average Movement7.8%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.2%

Stable Share Price: SYY is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: SYY's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
196971,000Kevin Houricanhttps://www.sysco.com

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products primarily 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.

Sysco Corporation Fundamentals Summary

How do Sysco's earnings and revenue compare to its market cap?
SYY fundamental statistics
Market CapUS$41.84b
Earnings (TTM)US$1.36b
Revenue (TTM)US$68.64b

30.8x

P/E Ratio

0.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
SYY income statement (TTM)
RevenueUS$68.64b
Cost of RevenueUS$56.32b
Gross ProfitUS$12.32b
Other ExpensesUS$10.96b
EarningsUS$1.36b

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)2.67
Gross Margin17.95%
Net Profit Margin1.98%
Debt/Equity Ratio752.9%

How did SYY perform over the long term?

See historical performance and comparison

Dividends

2.4%

Current Dividend Yield

71%

Payout Ratio