December 18, 2025 a 12:46 pm
SYY: Dividend Analysis - Sysco Corporation
Sysco Corporation, a leading player in the food distribution industry, exhibits a robust dividend profile with a remarkable history of consistent payouts. The company's commitment to shareholder returns is evident in its steady dividends over four decades. However, recent trends in dividend growth are modest yet promising, offering potential for future hikes depending on market conditions and operational performance.
📊 Overview
Sysco Corporation, operating within the Consumer Defensive sector, presents a dividend yield of 2.81%, which is competitive within its industry. The current dividend per share stands at $2.05, underscoring the company's commitment to delivering shareholder value. With a continuous dividend history spanning 40 years, Sysco demonstrates reliability, though the last dividend cut occurred in 2026, suggesting caution in future payouts.
| Metric | Value |
|---|---|
| Sector | Consumer Defensive |
| Dividend yield | 2.81 % |
| Current dividend per share | 2.05 USD |
| Dividend history | 40 years |
| Last cut or suspension | 2026 |
🗣️ Dividend History
The dividend history of Sysco Corporation reflects its resilience and its strategic commitment to rewarding its shareholders. A long track record not only implies stability but also the company's capability to manage economic downturns, providing investors with predictability in returns.
| Year | Dividend per Share (USD) |
|---|---|
| 2026 | 0.54 |
| 2025 | 2.10 |
| 2024 | 2.02 |
| 2023 | 1.98 |
| 2022 | 1.92 |
📈 Dividend Growth
Dividend growth is a crucial indicator of a company's development and potential in increasing shareholder value. It demonstrates the company's ability to generate enough free cash flow to support and increase dividend payments 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, suggesting a positive outlook for long-term income growth potential.
⚠️ Payout Ratio
Understanding the payout ratio helps assess the sustainability of a company's dividend. A lower payout ratio can signal a buffer for the company to invest in growth or manage through downturns without cutting dividends.
| Key figure | Ratio |
|---|---|
| EPS-based | 54.07 % |
| Free cash flow-based | 55.92 % |
The EPS-based payout ratio of 54.07% and FCF-based ratio of 55.92% are on the high end, indicating that while dividends are well covered, they leave a moderate margin for buffer during less profitable periods.
📊 Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics are critical in evaluating a company's financial health and its ability to support its operational and financial commitments.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 4.86% | 6.16% | 5.51% |
| Earnings Yield | 4.99% | 5.58% | 4.70% |
| CAPEX to Operating Cash Flow | 34.71% | 27.84% | 27.65% |
| Stock-based Compensation to Revenue | 0.11% | 0.13% | 0.13% |
| Free Cash Flow / Operating Cash Flow Ratio | 66.28% | 72.16% | 72.35% |
The relatively stable free cash flow and efficient capital allocation highlight Sysco's ability to sustain and potentially enhance its dividend payments while supporting future growth initiatives.
📈 Balance Sheet & Leverage Analysis
Analyzing a company's leverage and balance sheet provides insights into its financial stability and the risks associated with its debt load.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 7.92 | 6.96 | 5.56 |
| Debt-to-Assets | 0.54 | 0.52 | 0.49 |
| Debt-to-Capital | 0.89 | 0.87 | 0.85 |
| Net Debt to EBITDA | 3.35 | 2.94 | 2.82 |
| Current Ratio | 1.21 | 1.19 | 1.24 |
| Quick Ratio | 0.70 | 0.69 | 0.72 |
| Financial Leverage | 14.63 | 13.40 | 11.36 |
Sysco's substantial leverage suggests potential risks in economic downturns, requiring careful monitoring to maintain its financial strategies and shareholder commitments.
✅ Fundamental Strength & Profitability
Fundamental strength and profitability metrics offer a view into the company's efficiency and effectiveness in utilizing its resources.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 99.89% | 105.11% | 88.10% |
| Return on Assets | 6.83% | 7.85% | 7.76% |
| Net Margin | 2.25% | 2.48% | 2.32% |
| EBIT Margin | 3.75% | 4.02% | 3.68% |
| EBITDA Margin | 5.08% | 5.29% | 4.85% |
| Gross Margin | 18.40% | 18.53% | 18.28% |
| Research & Development to Revenue | 0.00% | 0.00% | 0.00% |
The data reflects Sysco's strong operational performance with high returns on equity and assets, albeit with no investments in R&D, which could affect long-term innovation.
📉 Price Development
📊 Dividend Scoring System
| Category | Score | Indicator |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 3 | |
| Financial stability | 3 | |
| Dividend continuity | 4 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 29/40
Rating
Sysco Corporation's dividend profile is solid, characterized by reliability and a robust history of payouts. However, its significant leverage and moderate growth rate suggest that while it remains a staple for dividends, investors should monitor financial strategies closely to hedge risks associated with economic fluctuations. The overall scoring indicates a strong buy for income-focused investors but advises vigilance on financial developments.