May 26, 2025 a 11:31 am
SYY: Dividend Analysis - Sysco Corporation
Sysco Corporation is a robust player in the food distribution sector, renowned for its strong market presence and consistent dividend payouts. With nearly four decades of uninterrupted dividend history, it offers a lucrative opportunity for income-focused investors. While the current dividend yield stands at a moderate level, Sysco's sustained growth trajectory and strategic market positioning underscore its potential as a reliable income source. However, investors should remain cognizant of its debt levels and economic sensitivities.
📊 Overview
| Detail | Value |
|---|---|
| Sector | Food Distribution |
| Dividend yield | 2.90% |
| Current dividend per share | 2.01 USD |
| Dividend history | 39 years |
| Last cut or suspension | None |
🗣️ Dividend History
The consistency in Sysco's dividend payments reflects its financial stability and commitment to shareholder returns. The extended history without cuts underscores investor confidence.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.56 |
| 2024 | 2.02 |
| 2023 | 1.98 |
| 2022 | 1.92 |
| 2021 | 1.84 |
📈 Dividend Growth
Dividend growth is a critical indicator of a company's ability to enhance shareholder value over time. It showcases the potential for increasing income streams for investors.
| Time | 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 critical measure of dividend sustainability. For Sysco, the EPS-based payout ratio is 51.37%, and the Free Cash Flow-based ratio is 46.44%, indicating a well-covered dividend policy.
| Key Figure | Ratio |
|---|---|
| EPS-based | 51.37% |
| Free cash flow-based | 46.44% |
These ratios signal a healthy level of dividend coverage, providing a buffer for future payments and suggesting a low risk of future dividend cuts.
✅ Cashflow & Capital Efficiency
Cashflow measures offer insight into a company's operational performance and investment efficiency. Sysco's robust Earnings Yield and CAPEX management reflect a strong cash generating capability.
| 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 | 28.43% | 27.65% | 35.34% |
| Stock-based Compensation to Revenue | 0.13% | 0.13% | 0.18% |
| Free Cash Flow / Operating Cash Flow Ratio | 0.72 | 0.72 | 0.65 |
The stability of these metrics indicates efficient cash management and sustainability in capital investment, supporting continued dividends.
⚠️ Balance Sheet & Leverage Analysis
Analyzing leverage and liquidity ratios provides insight into Sysco's financial resilience. Their debt-to-equity ratio requires close monitoring, given its implications on financial flexibility.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 6.96 | 5.56 | 8.24 |
| Debt-to-Assets | 51.95% | 48.93% | 51.57% |
| Debt-to-Capital | 87.44% | 84.75% | 89.18% |
| Net Debt to EBITDA | 2.94 | 2.84 | 3.24 |
| Current Ratio | 1.20 | 1.24 | 1.20 |
| Quick Ratio | 0.69 | 0.72 | 0.69 |
| Financial Leverage | 13.40 | 11.36 | 15.98 |
The financial leverage ratio's spike suggests a need for careful debt management to maintain market confidence and financial stability.
✅ Fundamental Strength & Profitability
Sysco's profitability ratios are indicative of its strong operational performance, essential for maintaining its competitive edge and dividend payments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 105.11% | 88.12% | 98.32% |
| Return on Assets | 7.85% | 7.76% | 6.15% |
| Margins: Net | 2.48% | 2.32% | 1.98% |
| Margins: EBIT | 4.02% | 3.68% | 3.23% |
| Margins: EBITDA | 5.29% | 4.81% | 4.74% |
| Gros Margin | 18.53% | 18.28% | 17.95% |
| Research & Development to Revenue | 0% | 0% | 0% |
The strong return metrics showcase Sysco's ability to generate profits relative to shareholder equity and assets, securing its position as a solid investment.
📊 Price Development
📊 Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 4 | |
| Financial stability | 3 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 34 / 40
Rating
Sysco Corporation presents a compelling dividend investment opportunity characterized by consistent payouts and moderate growth. Despite its high leverage, the strength of its dividend history and cash flow stability offers a promising outlook for income-driven investors. We recommend a "Hold" with an inclination to "Buy" upon favorable debt assessment.