Company Overview
US Foods Holding Corp. operates as a major distributor within the consumer defensive sector, specifically serving the food distribution industry by marketing, selling, and distributing fresh, frozen, and dry food alongside non-food products to foodservice customers across the United States. The company also provides MOXe, an all-in-one foodservice business application, which serves its diverse base of customers that includes independent operators. This entity represents a significant market presence with a total market capitalization of $19.92 billion and reported annual revenue of $39.42 billion over the trailing twelve months. The workforce supporting these operations consists of 30,000 employees, indicating a substantial organizational footprint. These valuation and revenue figures collectively demonstrate that US Foods holds a dominant position in the foodservice supply chain, possessing the scale required to influence pricing dynamics and maintain extensive distribution networks essential for the food industry.
Financial Health
The company generated $39.42 billion in revenue, reported net income of $676.00 million, and achieved an EBITDA of $1.71 billion during the trailing twelve months. The substantial disparity between the $39.42 billion revenue figure and the $676.00 million net income highlights a cost structure characterized by high operating expenses, typical of the low-margin food distribution model. Despite these costs, the business produced $825.37 million in free cash flow, which signifies a robust capacity to fund capital expenditures, repay debt obligations, or pursue strategic acquisitions without relying on external financing. Profitability efficiency is further evidenced by three distinct margin metrics: a gross margin of 17.4%, an operating margin of 3.6%, and a profit margin of 1.7%. The narrow profit margin relative to revenue underscores the competitive nature of the industry where pricing power is limited and volume is the primary driver of absolute earnings. On the balance sheet, the company holds $41.00 million in cash against total debt of $5.72 billion, resulting in a debt-to-equity ratio of 132.88, which indicates a highly leveraged financial position that relies heavily on creditor funding. Liquidity for short-term obligations is assessed via a current ratio of 1.16, suggesting that current assets are just sufficient to cover current liabilities, leaving little buffer for unexpected cash outflows. Management effectiveness is quantified by a return on equity of 15.3% and a return on assets of 5.7%, revealing that the company generates returns that are disproportionately higher than its asset base, a common trait for capital-intensive distribution firms.
Valuation Assessment
Valuation metrics for US Foods Holding Corp. indicate a trailing P/E ratio of 30.38 compared to a forward P/E of 15.96, suggesting that the market currently prices in significant future earnings growth that is expected to normalize the multiple over time. The price-to-book ratio stands at 4.57, implying that the market values the company at a substantial premium over its tangible book value, likely reflecting the intangible value of its distribution network and brand reputation. Alternative valuation measures provide additional context, with a price-to-sales ratio of 0.51 and an EV/EBITDA of 14.84, which suggests the company is trading at a moderate multiple relative to its sales and earnings power when adjusted for enterprise value. Historical price volatility is framed by a 52-week high of $102.13 and a 52-week low of $57.36, placing the current trading price within a range that reflects recent market sentiment and sector rotation. The stock exhibits a beta of 0.98, indicating that its price volatility moves in lockstep with the broader market, offering a risk profile that mirrors general equity market movements rather than providing significant defensive hedging characteristics.
Growth & Income
Growth dynamics are defined by a revenue growth rate of 3.3% year-over-year and a remarkable earnings growth rate of 205.9% year-over-year, demonstrating that earnings are expanding at a pace vastly superior to top-line sales, likely driven by margin expansion or one-time accounting adjustments. The company does not distribute dividends to shareholders, as evidenced by a dividend yield of N/A and a payout ratio of 0.0%, which confirms that the firm retains all of its net income to reinvest in operations, pay down debt, or fund internal growth initiatives. This reinvestment strategy is consistent with a mature distribution business that prioritizes balance sheet strengthening and operational scale over immediate income distribution to investors. The overall growth and income profile characterizes US Foods as a capital-redeploying entity where value creation is driven by operational efficiency and earnings leverage rather than dividend yields.