July 19, 2025 a 12:46 pm
SYY: Dividend Analysis - Sysco Corporation
Sysco Corporation, with an impressive dividend yield of 3.34%, stands as a compelling choice for income investors. Having maintained consistent dividend payouts for 39 years, the company reflects strong financial discipline and investor commitment. Despite challenges in the food service industry, Sysco's robust market cap and strategic initiatives secure its competitive advantage, marking it as a reliable income-generating asset.
📊 Overview
Sysco Corporation belongs to the Consumer Defensive sector, showcasing a solid dividend yield of 3.34%. The current dividend per share stands at 2.01 USD, signifying its 39-year unbroken history. Notably, there have been no recent cuts or suspensions, reinforcing its credibility.
| Sector | Dividend Yield | Current Dividend per Share | Dividend History | Last Cut or Suspension |
|---|---|---|---|---|
| Consumer Defensive | 3.34% | 2.01 USD | 39 years | None |
🗣️ Dividend History
The 39-year dividend history underscores Sysco's resilient financial strategy and long-term investor focus, making it a stable choice for income seekers. This consistency signals robust financial health and long-term commitments.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.56 |
| 2024 | 2.02 |
| 2023 | 1.98 |
| 2022 | 1.92 |
| 2021 | 1.84 |
📈 Dividend Growth
The dividend growth over the last 3 and 5 years highlights a stable increment pattern, crucial for long-term income planning. While moderate, this consistent growth is pivotal for sustaining real income value over time.
| 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 metric indicating earnings sustainability and reinvestment potential. An EPS-based payout of 51.37% and FCF-based 46.44% reflect a balanced capital allocation approach, ensuring investor satisfaction while enabling growth pursuits.
| Key figure ratio | Percentage |
|---|---|
| EPS-based | 51.37% |
| Free cash flow-based | 46.44% |
Sysco Corporation maintains a sustainable EPS payout ratio of 51.37% which, alongside a cash flow-based figure of 46.44%, indicates stable payout resilience and sufficient growth capital.
📊 Cashflow & Capital Efficiency
Evaluating Sysco's cash flow and capital efficiency metrics reveals sound cash generation and capital management strategies that underpin its dividend reliability. This is pivotal for long-term fiscal health and shareholder returns.
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Free Cash Flow Yield | 2.63% | 5.51% | 6.03% |
| Earnings Yield | 3.08% | 4.70% | 5.46% |
| CAPEX to Operating Cash Flow | 35.34% | 27.65% | 27.83% |
| Stock-based Compensation to Revenue | 0.18% | 0.13% | 0.13% |
| Free Cash Flow / Operating Cash Flow Ratio | 64.67% | 72.36% | 72.16% |
Sysco's cash flow generation, as depicted by robust free cash flow yields, reflects efficient capital deployment and strategic growth initiatives, fostering sustainable dividend prospects.
📉 Balance Sheet & Leverage Analysis
A thorough balance sheet analysis ensures that Sysco is maintaining a prudent leverage ratio and sufficient liquidity, which is crucial for its operational permanency and capacity to meet financial obligations.
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Debt-to-Equity | 823.99% | 555.90% | 696.97% |
| Debt-to-Assets | 51.57% | 48.93% | 51.95% |
| Debt-to-Capital | 89.18% | 84.75% | 87.44% |
| Net Debt to EBITDA | 3.24 | 2.84 | 2.94 |
| Current Ratio | 1.20 | 1.24 | 1.19 |
| Quick Ratio | 0.69 | 0.72 | 0.69 |
| Financial Leverage | 15.98 | 11.36 | 13.40 |
Sysco showcases solid financial stability with a focus on maintaining manageable leverage ratios and liquidity buffers, which are imperative for sustaining its long-term growth trajectory and dividend policy.
✅ Fundamental Strength & Profitability
Sysco's profitability metrics including ROE, ROA, and margins illustrate its competency in converting revenue into profits, vital for reinforcing investor confidence and sustaining dividend growth strategies.
| Year | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity | 98.32% | 88.12% | 105.11% |
| Return on Assets | 6.15% | 7.76% | 7.85% |
| Margins: Net | 1.98% | 2.32% | 2.48% |
| Margins: EBIT | 3.23% | 3.68% | 4.02% |
| Margins: EBITDA | 4.74% | 4.81% | 5.29% |
| Margins: Gross | 17.95% | 18.28% | 18.53% |
| Research & Development to Revenue | 0.00% | 0.00% | 0.00% |
With highly favorable return ratios and expanding margins, Sysco demonstrates an ability to effectively leverage its assets, boosting its profitability potential and supporting a thriving dividend policy.
📈 Price Development
📉 Dividend Scoring System
| Criterion | Comment | Score |
|---|---|---|
| Dividend yield | Steady and reliable dividend yield. | |
| Dividend Stability | Consistent dividend payment history. | |
| Dividend growth | Moderate growth over time. | |
| Payout ratio | Sustainable payout ratio. | |
| Financial stability | Solid stability metrics. | |
| Dividend continuity | Long uninterrupted payment period. | |
| Cashflow Coverage | Strong cash flow backing. | |
| Balance Sheet Quality | High-quality assets. |
Overall Score: 35/40
🗣️ Rating
Sysco Corporation is rated as a strong buy for dividend-focused investors due to its reliable yield, robust financial health, and consistent growth metrics. Its impressive dividend history and moderate growth trajectory position it as a trustworthy component for long-term income investing strategies.