Company Overview
Sysco Corporation functions as a primary marketer and distributor of diverse food and related products serving the foodservice and food-away-from-home sectors across the United States, Canada, the United Kingdom, France, and internationally. Operating within the Consumer Defensive sector and the Food Distribution industry, the company provides essential supply chain infrastructure that supports businesses and institutions requiring consistent food inventory. The entity employs approximately 75,000 individuals and holds a market capitalization of $39.18B, while reporting annual revenue (TTM) of $82.65B. These valuation and revenue figures indicate that Sysco operates as a massive enterprise with significant market penetration, reflecting its status as a dominant player capable of influencing pricing and availability within the global foodservice distribution network.
Financial Health
The company generated revenue (TTM) of $82.65B with a net income (TTM) of $1.80B and an EBITDA of $4.52B, revealing a cost structure where operating expenses consume a substantial portion of gross sales before reaching the bottom line. The reported free cash flow stands at $1.75B, which demonstrates the company's ability to generate liquidity after capital expenditures and working capital changes, providing financial flexibility for operational needs or strategic initiatives. Three specific margin metrics illustrate the profitability hierarchy: a gross margin of 18.5% indicates the efficiency of core procurement and sales relative to cost of goods sold, an operating margin of 4.0% reflects the profitability of core business operations after overheads, and a profit margin of 2.2% represents the final net earnings relative to total sales. The balance sheet shows cash holdings of $1.23B against total debt of $14.97B, supported by a debt-to-equity ratio of 640.25, indicating a highly leveraged capital structure typical of capital-intensive distribution businesses. Liquidity for short-term obligations is assessed via a current ratio of 1.29, suggesting the company holds sufficient current assets to cover its current liabilities with a modest buffer. Return on Equity is reported at 82.3% and Return on Assets at 8.5%, metrics that reveal management's effectiveness in generating returns from shareholders' equity and total asset base, respectively, despite the high leverage present on the balance sheet.
Valuation Assessment
Valuation multiples show a Trailing Twelve Months (TTM) P/E Ratio of 22.05 compared to a Forward P/E of 16.15, implying that the market expects earnings growth in the future that would significantly lower the multiple over time. The Price to Book ratio is 17.16, indicating that the market values the company at a substantial premium over its book value, likely due to intangible assets, brand strength, or expected future cash flows not captured on the balance sheet. Alternative valuation metrics include a Price to Sales ratio of 0.47 and an EV/EBITDA of 11.73, which suggest the company is priced conservatively relative to its sales volume while maintaining a reasonable multiple relative to earnings before interest, taxes, depreciation, and amortization. The stock price has ranged between a 52-Week High of $91.85 and a 52-Week Low of $67.12; without a specific current price provided in the available facts, the precise percentage distance from the high cannot be calculated, but the range establishes the volatility envelope for the security. The Beta is 0.59, which indicates that the stock's price volatility is historically lower than the broader market, suggesting it may act as a defensive holding during periods of market turbulence.
Growth & Income
Growth metrics reveal a Revenue Growth (YoY) of 3.0% contrasted with an Earnings Growth (YoY) of -1.2%, implying that earnings are currently contracting relative to top-line sales, potentially due to margin compression or one-time costs impacting the net income figure. As a dividend payer, the company offers a Dividend Yield of 2.6% with a Payout Ratio of 57.4%, a level that appears sustainable given the high Return on Equity and the ability to generate consistent free cash flow relative to the dividend obligations. The combination of modest revenue expansion and declining earnings growth suggests a mature phase where volume growth is not outpacing profit deterioration, requiring close monitoring of margin trends to support future dividend increases. The overall growth and income profile is characterized by stable, albeit slowing, revenue expansion paired with a reliable dividend yield that appeals to income-focused investors seeking lower volatility exposure in the consumer defensive sector.