Dividend Stock Wednesday: Sysco (SYY-N)
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This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.
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Much of the food that is delivered to your favorite restaurants is probably delivered by Sysco. Sysco has seen a 5 year dividend growth rate of 16.8%with a current yield of 3.10%. As a result, I thought I might have a look at their stock to see if it is worth adding to my Watch List.
The Company: Sysco (SYY-N)
Sysco Corporation is the largest North American distributor of food and food related products to the foodservice or food-prepared-away-from-home industry. The company provides its products and services to restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers.
| No | |
| No |
THE FUNDAMENTALS
Revenue
Click to EnlargeRevenue Scoring
| Criteria | Scoring |
| Consistenly Up with No Down Years | 1.0 |
| Up Trend with Less Than 2 Down Years | 0.5 |
| Choppy with Greater Than 2 Down Years | 0.0 |
| My Revenue Score | 1.0 out of 1.0 |
Earnings Per Share
Click to EnlargeEarnings Per Share Scoring
| Criteria | Scoring |
| Consistenly Up with No Down Years | 1.0 |
| Up Trend with Less Than 2 Down Years | 0.5 |
| Choppy with Greater Than 2 Down Years | 0.0 |
| My EPS Score | 0.5 out of 1.0 |
TOTAL FUNDAMENTALS SCORE: 1.5 out of 2.0
THE RATIOS
Return on Equity
Click to EnlargeReturn on Equity Scoring
| Criteria | Scoring |
| Above 15% for Last 5 Years | 1.0 |
| At Least One Year Below 15% in Last 5 Years | 0.0 |
| My ROE Score | 1.0 out of 1.0 |
Other Ratios
| Ratio | Criteria | Value | Score (Pass=1 / Fail = 0) |
| Debt to Equity | Less Than 0.50 | 0.62 | 0.0 |
| Payout Ratio | Less Than 60% | 45% | 1.0 |
| Credit Rating | BBB+ | AA- | 1.0 |
| Total Ratio Score | 2.0 out of 3.0 |
TOTAL RATIOS SCORE: 3.0 out of 4.0
DIVIDEND DATA
Annual Dividends
Click to EnlargeDividend Growth Years
| Criteria | Scoring |
| 10+ Years of Dividend Growth | 1.0 |
| Less Than 10 Years of Dividend Growth | 0.0 |
| My Dividend Growth Years Score | 0.0 out of 1.0 |
Dividend Growth Rate
Click to Enlarge| Criteria | Scoring |
| Current Year Div Growth Greater Than or Equal to Previous Year | 1.0 |
| Current Year Div Growth Less Than Previous Year | 0.0 |
| My Dividend Growth Rate Score | 0.0 out of 1.0 |
TOTAL DIVIDEND GROWTH SCORE: 0.0 out of 2.0
STOCK VALUATION
| Valuation Metric | Criteria | Value | Score (Pass=1 / Fail = 0) |
| Dividend Yield | Cur Yld Greater Than 10 Yr Avg Yld | 1.5% | 1.0 |
| Div Yld Compared to SPY Div Yld | Cur Yld Greater Than SPY Yld | 1.6% | 1.0 |
| P/E Ratio | Cur P/E Less Than 10 Yr Avg P/E | 24.2 | 1.0 |
| Relative P/E | Relative P/E Less Than 1.0 | 0.54 | 1.0 |
| Price to Sales | Less Than 1.5 | 0.68 | 1.0 |
| Total Ratio Valuation Score | 5.0 out of 5.0 |
Expected Return
| Criteria | Scoring | |
| Expected Return Score Greater Than 10% | – | 1.0 |
| Expected Return Score Less Than 10% | – | 0.0 |
| My Expected Return Score | 12.1% | 1.0 out of 1.0 |
TOTAL STOCK VALUATION SCORE: 6.0 out of 6.0
TARGET PRICE
Canadian Shareowner’s Association Stock Selection Guide Software Buy Price
| Buy Zone |
Maybe Zone |
Sell Zone |
Current Price | Rating | Scoring (Buy=2.0, Other=0.0) |
| 2.0 |
TOTAL TARGET PRICE SCORE: 2.0 out of 2.0
SUMMARY
Points Earned:
12 out of 16 – half points are rounded down to be conservative
The stock is rated Medium with 12.5 points earned through my analysis of the stock. Dividend growth has been strong in the past five years, however with a drop in 2005 and 2006 it looks a bit deceiving. However, these are the trends dividend investors like to see. If they can keep this dividend growth up, then perhaps we will see 10 years of consistent dividend growth and therefore a stock I would be more interested in. I am going to keep an eye on it – not to add to my watch list just yet but for perhaps in the future.
| Rating | Points Required |
| High | 14+ points |
| Medium | 10-13 points |
| Low | Less Than 10 points |
Reminder: This is an analysis completed by The Dividend Guy. It is not to be used as investment advice or a recommendation to buy, hold, or sell any stocks discussed. Please ensure you complete your own analysis.
The Dividend Guy does not own shares in UPS
1 Comments on this post
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Dividends4Life said:
I just sent you an email.
Best Wishes,
D4LJuly 16th, 2008 at 8:00 am
