Sysco (NYSE: SYY) and Companhia Brasileira de Distribuicao (NYSE:CBD) are both mid-cap non-cyclical consumer goods & services companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Profitability

This table compares Sysco and Companhia Brasileira de Distribuicao’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sysco 2.12% 58.47% 7.68%
Companhia Brasileira de Distribuicao 0.64% 6.47% 1.97%

Volatility & Risk

Sysco has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Companhia Brasileira de Distribuicao has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500.

Earnings and Valuation

This table compares Sysco and Companhia Brasileira de Distribuicao’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sysco $55.37 billion 0.57 $1.14 billion $2.19 27.81
Companhia Brasileira de Distribuicao $11.95 billion 0.49 -$138.18 million $0.31 70.48

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

Insider and Institutional Ownership

80.2% of Sysco shares are owned by institutional investors. Comparatively, 3.3% of Companhia Brasileira de Distribuicao shares are owned by institutional investors. 9.6% of Sysco shares are owned by company insiders. Comparatively, 0.0% of Companhia Brasileira de Distribuicao shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Sysco pays an annual dividend of $1.32 per share and has a dividend yield of 2.2%. Companhia Brasileira de Distribuicao pays an annual dividend of $0.33 per share and has a dividend yield of 1.5%. Sysco pays out 60.3% of its earnings in the form of a dividend. Companhia Brasileira de Distribuicao pays out 106.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sysco has increased its dividend for 46 consecutive years. Sysco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Sysco and Companhia Brasileira de Distribuicao, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sysco 0 5 7 0 2.58
Companhia Brasileira de Distribuicao 0 1 2 0 2.67

Sysco currently has a consensus target price of $58.40, indicating a potential downside of 4.11%. Given Sysco’s higher probable upside, analysts clearly believe Sysco is more favorable than Companhia Brasileira de Distribuicao.

Summary

Sysco beats Companhia Brasileira de Distribuicao on 14 of the 17 factors compared between the two stocks.

About Sysco

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 Companhia Brasileira de Distribuicao

Companhia Brasileira de Distribuicao, directly or through its subsidiaries, is engaged in the retail of food, clothing, home appliances, electronics and other items through its chain of hypermarkets, supermarkets, specialized stores and department stores principally under the trade names Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Super, Minimercado Extra, Assai an the neighborhood shopping mall brand Conviva. The Company’s segments include Retail, and Cash and carry segment. The Company’s Retail segment includes the banners Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Supermercado, Minimercado Extra, Posto Extra, Drogaria Extra and GPA Malls & Properties. Its Cash & Carry segment includes the brand Assai. The Company is engaged in operations of retail stores located in approximately 20 states and the Federal District of Brazil.

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