April 18, 2025 a 02:46 pm
SYY: Dividend Analysis - Sysco Corporation
Sysco Corporation stands as a prominent player in the foodservice industry, demonstrating resilience through consistent dividend payments over almost four decades. This analysis delves deeper into the company's robust dividend profile, highlighting its yield, growth trajectory, and payout strategies. Investors may consider its substantial market position and persistent dividend increases an attractive feature in a diversified dividend-focused portfolio.
📊 Overview
Sysco Corporation, a leader in the consumer goods sector, is a strong dividend contender with a current yield of 2.86%, reflecting its stability and reliability in shareholder returns. With a consistent dividend history spanning 39 years and no recent cuts, Sysco’s dividend policy illustrates its strategic commitment to returning value to investors.
| Key Metrics | Value |
|---|---|
| Sector | Consumer Goods |
| Dividend Yield | 2.86 % |
| Current Dividend per Share | 2.01 USD |
| Dividend History | 39 years |
| Last Cut or Suspension | None |
📈 Dividend History
Examining Sysco's dividend history reveals its financial discipline and operational success in sustaining payouts even during market volatilities. This track record is crucial for long-term investors seeking reliable income streams.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.02 |
| 2024 | 2.02 |
| 2023 | 1.98 |
| 2022 | 1.92 |
| 2021 | 1.84 |
📉 Dividend Growth
Sysco’s dividend growth signifies financial health and commitment to increasing shareholder value through regular income enhancement. Over 3 and 5 years, the growth rates speak to moderate yet dependable increases, a critical factor for dividend-focused strategies.
| Time Frame | Growth |
|---|---|
| 3 years | 3.16 % |
| 5 years | 5.30 % |
The average dividend growth is 5.30% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is a metric indicating the proportion of earnings distributed as dividends. It is crucial to maintaining a sustainable dividend policy.
| Key Figure | Ratio |
|---|---|
| EPS-based | 51.07 % |
| Free cash flow-based | 50.28 % |
Sysco’s payout ratios indicate a balanced approach between distributing profits and retaining cash flow for reinvestment, reflecting a healthy EPS payout of 51.07% and a free cash flow basis of 50.28%.
📊 Cashflow & Capital Efficiency
Assessing cash flow and capital efficiency provides insight into the company’s operational cash allocation prowess and return on capital investment. A comprehensive view across several years allows for forecasting and financial health assessment.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 6.03 % | 5.51 % | 2.63 % |
| Earnings Yield | 5.46 % | 4.70 % | 3.08 % |
| CAPEX to Operating Cash Flow | 27.84 % | 27.67 % | 35.33 % |
| Stock-based Compensation to Revenue | 0.13 % | 0.13 % | 0.18 % |
| Free Cash Flow / Operating Cash Flow Ratio | 51.56 % | 56.27 % | 34.67 % |
| Return on Invested Capital | 14.89 % | 16.18 % | 12.88 % |
Sysco's consistent cash flow yield and moderate CAPEX demonstrate prioritized asset growth and returns from investments, signaling a robust operational structure.
🤔 Balance Sheet & Leverage Analysis
Scrutinizing the balance sheet unveils insights into a company’s financial leverage and stability, keys to understanding risk and valuation.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 696.97 % | 555.90 % | 823.99 % |
| Debt-to-Assets | 51.95 % | 48.93 % | 51.48 % |
| Debt-to-Capital | 87.44 % | 84.75 % | 89.18 % |
| Net Debt to EBITDA | 2.94 | 2.84 | 3.40 |
| Current Ratio | 1.20 | 1.24 | 1.20 |
| Quick Ratio | 0.69 | 0.72 | 0.69 |
| Financial Leverage | 13.40 | 11.36 | 16.01 |
Sysco maintains an aggressive investment strategy as reflected by its debt-to-equity ratio, balanced by stable asset management, ensuring control over financial leverage.
🚀 Fundamental Strength & Profitability
Understanding profitability and capital returns is essential. Sysco’s consistent performance on core profitability metrics and return on equity shows its ability to efficiently utilize assets and equity.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 105.11 % | 88.12 % | 98.32 % |
| Return on Assets | 7.85 % | 7.76 % | 6.14 % |
| Net Margin | 2.48 % | 2.32 % | 1.98 % |
| EBIT Margin | 4.02 % | 3.65 % | 3.23 % |
| EBITDA Margin | 5.29 % | 4.81 % | 4.51 % |
| Gross Margin | 18.53 % | 18.28 % | 17.95 % |
| Research & Development to Revenue | 0.00 % | 0.00 % | 0.00 % |
Sysco's profitability remains robust, with healthy returns on equity and modest improvements in net margins year over year reflecting effective cost management and competitive positioning.
📈 Price Development
📊 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Overall Score: 31/40
🗣️ Rating
Sysco Corporation showcases strong commitment towards shareholder value through its consistent and growth-oriented dividend policy. While the yield is moderate, its historical continuity, stable payout ratios, and potential for growth make it an appealing choice for income-seeking investors. The financial robustness, although impacted by high leverage, supports a strong dividend profile. Overall, Sysco Corporation can be considered a reliable investment for those looking for steady long-term returns.