Critical Comparison: Sysco Corporation (SYY) and US Foods Holding Corp. (USFD)
Sysco Corporation (NYSE: SYY) and US Foods Holding Corp. (NYSE:USFD) are both mid-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.
Institutional & Insider Ownership
79.7% of Sysco Corporation shares are held by institutional investors. 9.6% of Sysco Corporation shares are held by insiders. Comparatively, 1.6% of US Foods Holding Corp. shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
This is a summary of current recommendations for Sysco Corporation and US Foods Holding Corp., as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|US Foods Holding Corp.||0||3||7||0||2.70|
Sysco Corporation presently has a consensus price target of $56.09, indicating a potential upside of 2.17%. US Foods Holding Corp. has a consensus price target of $31.67, indicating a potential upside of 15.61%. Given US Foods Holding Corp.’s stronger consensus rating and higher possible upside, analysts clearly believe US Foods Holding Corp. is more favorable than Sysco Corporation.
This table compares Sysco Corporation and US Foods Holding Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|US Foods Holding Corp.||1.11%||12.64%||3.61%|
Valuation & Earnings
This table compares Sysco Corporation and US Foods Holding Corp.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Sysco Corporation||$55.37 billion||0.52||$1.14 billion||$2.20||24.95|
|US Foods Holding Corp.||$22.92 billion||0.27||$209.79 million||$1.17||23.41|
Sysco Corporation has higher revenue and earnings than US Foods Holding Corp.. US Foods Holding Corp. is trading at a lower price-to-earnings ratio than Sysco Corporation, indicating that it is currently the more affordable of the two stocks.
Sysco Corporation pays an annual dividend of $1.32 per share and has a dividend yield of 2.4%. US Foods Holding Corp. does not pay a dividend. Sysco Corporation pays out 60.0% of its earnings in the form of a dividend. Sysco Corporation has increased its dividend for 46 consecutive years.
Sysco Corporation beats US Foods Holding Corp. on 12 of the 16 factors compared between the two stocks.
Sysco Corporation Company Profile
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.
US Foods Holding Corp. Company Profile
US Foods Holding Corp. is a holding company. The Company is a foodservice distributor in the United States. The Company, through US Foods, Inc. (USF), markets and primarily distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States. These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities, and retail locations. As of December 31, 2016, the Company provided approximately 400,000 fresh, frozen, and dry food stock-keeping units (SKUs), as well as non-food items, sourced from over 5,000 suppliers. As of January 31, 2017, it maintained 75 primary operating facilities, consisting of its 60 distribution centers and other supporting facilities.
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