SYSCO CORP (SYY) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:SYY - US8718291078 - Common Stock
76.21 USD
-0.63 (-0.82%)
76.21 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to SYY. SYY was compared to 38 industry peers in the Consumer Staples Distribution & Retail industry. While SYY belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. SYY is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year SYY was profitable.
- SYY had a positive operating cash flow in the past year.
- SYY had positive earnings in each of the past 5 years.
- Each year in the past 5 years SYY had a positive operating cash flow.
1.2 Ratios
- With a decent Return On Assets value of 6.71%, SYY is doing good in the industry, outperforming 71.05% of the companies in the same industry.
- With an excellent Return On Equity value of 87.76%, SYY belongs to the best of the industry, outperforming 97.37% of the companies in the same industry.
- With an excellent Return On Invested Capital value of 16.61%, SYY belongs to the best of the industry, outperforming 94.74% of the companies in the same industry.
- SYY had an Average Return On Invested Capital over the past 3 years of 15.85%. This is significantly below the industry average of 28.30%.
- The last Return On Invested Capital (16.61%) for SYY is above the 3 year average (15.85%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.71% | ||
| ROE | 87.76% | ||
| ROIC | 16.61% |
ROA(3y)7.48%
ROA(5y)6.21%
ROE(3y)97.71%
ROE(5y)85.04%
ROIC(3y)15.85%
ROIC(5y)13.74%
1.3 Margins
- SYY's Profit Margin of 2.21% is fine compared to the rest of the industry. SYY outperforms 60.53% of its industry peers.
- In the last couple of years the Profit Margin of SYY has grown nicely.
- SYY has a Operating Margin of 4.33%. This is in the better half of the industry: SYY outperforms 73.68% of its industry peers.
- SYY's Operating Margin has improved in the last couple of years.
- SYY has a worse Gross Margin (18.43%) than 63.16% of its industry peers.
- In the last couple of years the Gross Margin of SYY has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.33% | ||
| PM (TTM) | 2.21% | ||
| GM | 18.43% |
OM growth 3Y8.19%
OM growth 5Y19.17%
PM growth 3Y4.31%
PM growth 5Y40.76%
GM growth 3Y0.82%
GM growth 5Y-0.35%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), SYY is creating value.
- Compared to 1 year ago, SYY has less shares outstanding
- Compared to 5 years ago, SYY has less shares outstanding
- Compared to 1 year ago, SYY has a worse debt to assets ratio.
2.2 Solvency
- SYY has an Altman-Z score of 5.10. This indicates that SYY is financially healthy and has little risk of bankruptcy at the moment.
- SYY's Altman-Z score of 5.10 is fine compared to the rest of the industry. SYY outperforms 76.32% of its industry peers.
- The Debt to FCF ratio of SYY is 8.35, which is on the high side as it means it would take SYY, 8.35 years of fcf income to pay off all of its debts.
- SYY has a Debt to FCF ratio (8.35) which is in line with its industry peers.
- A Debt/Equity ratio of 5.54 is on the high side and indicates that SYY has dependencies on debt financing.
- The Debt to Equity ratio of SYY (5.54) is worse than 89.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.54 | ||
| Debt/FCF | 8.35 | ||
| Altman-Z | 5.1 |
ROIC/WACC2.19
WACC7.57%
2.3 Liquidity
- SYY has a Current Ratio of 1.15. This is a normal value and indicates that SYY is financially healthy and should not expect problems in meeting its short term obligations.
- Looking at the Current ratio, with a value of 1.15, SYY is in line with its industry, outperforming 55.26% of the companies in the same industry.
- SYY has a Quick Ratio of 1.15. This is a bad value and indicates that SYY is not financially healthy enough and could expect problems in meeting its short term obligations.
- SYY's Quick ratio of 0.65 is in line compared to the rest of the industry. SYY outperforms 52.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
- SYY shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.39%.
- Measured over the past years, SYY shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.52% on average per year.
- SYY shows a small growth in Revenue. In the last year, the Revenue has grown by 2.92%.
- SYY shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.00% yearly.
EPS 1Y (TTM)4.39%
EPS 3Y11.01%
EPS 5Y17.52%
EPS Q2Q%5.5%
Revenue 1Y (TTM)2.92%
Revenue growth 3Y5.84%
Revenue growth 5Y9%
Sales Q2Q%3.24%
3.2 Future
- SYY is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.09% yearly.
- Based on estimates for the next years, SYY will show a small growth in Revenue. The Revenue will grow by 4.22% on average per year.
EPS Next Y3.9%
EPS Next 2Y7.01%
EPS Next 3Y7.36%
EPS Next 5Y11.09%
Revenue Next Year3.9%
Revenue Next 2Y4.44%
Revenue Next 3Y4.04%
Revenue Next 5Y4.22%
3.3 Evolution
- Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 16.86, which indicates a correct valuation of SYY.
- 65.79% of the companies in the same industry are more expensive than SYY, based on the Price/Earnings ratio.
- SYY's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- Based on the Price/Forward Earnings ratio of 14.92, the valuation of SYY can be described as correct.
- SYY's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. SYY is cheaper than 65.79% of the companies in the same industry.
- SYY is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.86 | ||
| Fwd PE | 14.92 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SYY indicates a somewhat cheap valuation: SYY is cheaper than 65.79% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as SYY.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.82 | ||
| EV/EBITDA | 10.91 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- SYY has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)4.32
PEG (5Y)0.96
EPS Next 2Y7.01%
EPS Next 3Y7.36%
5. Dividend
5.1 Amount
- SYY has a Yearly Dividend Yield of 2.81%. Purely for dividend investing, there may be better candidates out there.
- SYY's Dividend Yield is rather good when compared to the industry average which is at 0.73. SYY pays more dividend than 92.11% of the companies in the same industry.
- SYY's Dividend Yield is rather good when compared to the S&P500 average which is at 1.81.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.81% |
5.2 History
- The dividend of SYY has a limited annual growth rate of 4.23%.
- SYY has paid a dividend for at least 10 years, which is a reliable track record.
- The dividend of SYY decreased in the last 3 years.
Dividend Growth(5Y)4.23%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 55.57% of the earnings are spent on dividend by SYY. This is a bit on the high side, but may be sustainable.
- SYY's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP55.57%
EPS Next 2Y7.01%
EPS Next 3Y7.36%
SYSCO CORP / SYY FAQ
What is the ChartMill fundamental rating of SYSCO CORP (SYY) stock?
ChartMill assigns a fundamental rating of 5 / 10 to SYY.
What is the valuation status of SYSCO CORP (SYY) stock?
ChartMill assigns a valuation rating of 4 / 10 to SYSCO CORP (SYY). This can be considered as Fairly Valued.
What is the profitability of SYY stock?
SYSCO CORP (SYY) has a profitability rating of 7 / 10.
What is the expected EPS growth for SYSCO CORP (SYY) stock?
The Earnings per Share (EPS) of SYSCO CORP (SYY) is expected to grow by 3.9% in the next year.
Can you provide the dividend sustainability for SYY stock?
The dividend rating of SYSCO CORP (SYY) is 6 / 10 and the dividend payout ratio is 55.57%.