Sysco Corporation (NYSE: SYY) and DAVIDsTEA (NASDAQ:DTEA) are both consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Risk & Volatility

Sysco Corporation has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500. Comparatively, DAVIDsTEA has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Insider & Institutional Ownership

79.9% of Sysco Corporation shares are owned by institutional investors. Comparatively, 16.8% of DAVIDsTEA shares are owned by institutional investors. 8.8% of Sysco Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Sysco Corporation and DAVIDsTEA’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sysco Corporation $55.37 billion 0.51 $3.03 billion $2.09 25.54
DAVIDsTEA N/A N/A N/A ($0.26) -17.12

Sysco Corporation has higher revenue and earnings than DAVIDsTEA. DAVIDsTEA is trading at a lower price-to-earnings ratio than Sysco Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

Sysco Corporation pays an annual dividend of $1.32 per share and has a dividend yield of 2.5%. DAVIDsTEA does not pay a dividend. Sysco Corporation pays out 63.2% of its earnings in the form of a dividend. Sysco Corporation has raised its dividend for 46 consecutive years.

Analyst Recommendations

This is a summary of current ratings for Sysco Corporation and DAVIDsTEA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sysco Corporation 0 7 6 0 2.46
DAVIDsTEA 1 3 0 0 1.75

Sysco Corporation currently has a consensus price target of $56.09, suggesting a potential upside of 5.10%. DAVIDsTEA has a consensus price target of $6.75, suggesting a potential upside of 51.69%. Given DAVIDsTEA’s higher probable upside, analysts clearly believe DAVIDsTEA is more favorable than Sysco Corporation.

Profitability

This table compares Sysco Corporation and DAVIDsTEA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sysco Corporation 2.06% 53.25% 7.62%
DAVIDsTEA -3.98% 1.51% 1.19%

Summary

Sysco Corporation beats DAVIDsTEA on 11 of the 15 factors compared between the two stocks.

About Sysco Corporation

Sysco Corporation (Sysco) is a distributor of food and related products primarily to the foodservice or food-away-from-home industry. The Company’s segments include Broadline, SYGMA and Other. The Broadline segment includes its Broadline operations located in the Bahamas, Canada, Costa Rica, Ireland, Mexico and the United States. Broadline operating companies distribute a full line of food products and a range of non-food products to both traditional and chain restaurant customers, hospitals, schools, hotels, industrial caterers and other venues where foodservice products are served. SYGMA operating companies distribute a full line of food products and a range of non-food products to certain chain restaurant customer locations. The Other segment includes the Company’s specialty produce; custom-cut meat operations; lodging industry segments; a company that distributes specialty imported products; a company that distributes to international customers, and Sysco Ventures platform.

About DAVIDsTEA

DAVIDsTEA Inc. is engaged in the retail and online sale of tea, tea accessories, and food and beverages in Canada and in the United States. The Company’s segments include Canada and the U.S. The Company is a branded retailer of specialty tea, offering approximately 150 loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories, and food and beverages primarily through approximately 190 DAVIDsTEA stores, which are operated by the Company, and its Website, davidstea.com. Additionally, the Company offers on-the-go tea beverages in its retail stores. The Company’s tea accessories include tea mugs, travel mugs, teacup sets, teapots, tea makers, kettles, infusers, filters, frothers, tins and spoons. The Company offers beverages range from the standard hot or iced tea to its Tea Lattes. The Company’s different flavors of loose-leaf tea span eight tea categories: white, green, oolong, black, pu’erh, mate, rooibos and herbal tea.

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