- Sysco Corporation's stock dividend continues to grow.
- The stock is widely held by institutions and analysts.
- Sysco's global operations have risen the company to blue-chip status.
Interested in Sysco stock dividend payments? It's a good move on your part. Sysco stock is a high-quality blue-chip investment that can pay off with more than just dividends. Over the course of the company’s history, its share prices have risen more than 1,000%, more than doubling from 2010 to the onset of the COVID-19 pandemic.
The company's total return has outpaced the S&P 500 by more than 300% over the past few decades, which can only help your investments. By the time you reach the end of this article, you will understand why.
When it comes to dividends, Sysco is a crown prince of dividend payers. The company has more than four decades of distribution increases in its SYY dividend history and is well on its way to becoming a Dividend King. Dividend King stocks are stocks that have increased their dividends for at least 50 years and have proven their reliability time and time again as well as their ability to withstand economic cycles. Withstanding economic cycles is of utmost importance for buy-and-hold investors looking to maintain steady and stable, if not growing, income at all times.
Sysco Corporation History
Sysco Corporation (NYSE: SYY) was founded in 1969 as a food distributor in Irving, Texas. It has since grown to the largest purveyor of food equipment and tabletop items in the U.S. and has over 600,000 clients. The company is also a global operator, with 330 distribution facilities in 90 countries. It is a member of the S&P 500 and the S&P 500 Dividend Aristocrat index. The company is the third largest business in Texas outside of the oil industry and ranks 70th on the Forbes Fortune 500 list.
Sysco serves a wide variety of clients that all include some form of food service operation. Clients range from restaurants and hotels to private clubs, hospitals, educational institutions and others. The company can attribute its success in part to its fleet of trucks and distribution centers. The fleet consists of roughly 14,000 vehicles, making it one of the largest trucking outfits in the U.S. as well. The fleet includes tractor trailers, panel trucks and vans and employs nearly 60,000 people. The most interesting thing about the fleet, however, is that Sysco will electrify at least 35% of its fleet by 2030.
Growth and IPO
Sysco Corporation has grown from the first day of its operation via expanded territory, deepened penetration and acquisitions. The company had its IPO in 1970, shortly after becoming incorporated and has seen its shares climb from less than $0.10 to well over $70 each. As of November 2022, the company was worth upward of $42.5 billion in market capitalization and was bringing in more than $75 billion in annual revenues. That’s a big jump from the $115 million in revenue posted the first year of business.
Acquisitions and Investments
Sysco Corporation has made at least seven major acquisitions over the course of its history. These acquisitions helped it to expand into the east coast markets, expand its product offerings, and expand into European and other international markets. The most noteworthy attempt at acquisition was the purchase of US Foods. That was announced in 2013 but quashed by antitrust rulings in 2015. The judge said the merger/acquisition would result in a 75% market share and stifle competition. The merger was later ended leaving Sysco in the No. 1 spot and US Foods in the No. 2 spot.
Sysco Stock Dividend and SYY Dividend History
The company has been a regular payer of dividends since the early 1970s and has also become a well-known dividend growth stock as well. The company is listed on the Dividend Aristocrats Index and is a member of numerous ETFs based on the same. A Dividend Aristocrat is a member of the S&P 500 which increases its dividend payment every year for at least 25 years.
These stocks tend to be widely held due to their ultra-reliable dividend payments as well as their inclusion in the ETFs based on the Dividend Aristocrat Index. One benefit of widely held stocks, aside from their liquidity, involves reduced volatility relative to the S&P 500. In the case of Sysco, this isn’t exactly true because it has a beta of 1.1. A beta of 1.1 means the stock is slightly more volatile than the S&P 500 index — but only slightly.
SYY dividend history is not just a record of what’s been paid. It’s an indication of the company’s intent to continue paying the dividend and raising the distribution, two factors that will help drive institutional ownership to new highs.
Let's take a look at the dividend ratings, debt ratings and sell-side interest.
Sysco Dividend Ratings
Sysco has been paying a dividend for more than 50 years and has raised it for more than 40. The company’s payout ratio is a low 42% of earnings, which is more than manageable. At the current 7% distribution CAGR, the company can sustain dividend increases for decades into the future with no red flags on the balance sheet.
Sysco Debt Credit Ratings
Sysco Corporation has long-term debt on its balance sheet, including well-managed net debt. The leverage ratio was high at 7.2 in late 2022 but has been coming down. The rating agencies all rate the company’s debt at investment grade or better with a stable outlook.
The Sell-Side Owns Sysco
Sell-side interest in Sysco is high as well. The analysts rate the stock a "moderate buy" and have a price target that tends to lead the share price higher over the long term. The institutions own the bulk of the company and hold more than 80% of shares. The largest holders are Vanguard, Wellington Management Group and BlackRock, which hold more than 20% of the company together.
SYY Dividend Growth CAGR
The Sysco dividend CAGR is one of its more attractive features. The CAGR refers to the compound annual growth rate, or the pace of distribution growth the company has produced over previous years. The CAGR is often expressed at a three or five-year rate; comparing the two can indicate when the pace of distribution growth accelerates and declines. A stock with an accelerating CAGR has a powerful tailwind to support share prices.
Dividend Capture Strategy for SYY
The SYY stock dividend capture strategy is very simple. The idea is to buy the stock on or before the date of record to receive the next dividend payment and then sell it on the ex-dividend date. If the cost of the purchase and sale are equal to the dividend by owning the stock for one day, it is captured. If the stock is sold at a loss, the profits are reduced by the amount of the loss.
The dividend capture strategy is a popular tool for traders but one that comes with risk. The best advice may be to focus on high-quality stocks and stocks that are in an uptrend to try and alleviate risk. The dividend capture strategy is also a well-known strategy and is not uncommon for the price of dividend stocks to fall by the distribution amount on the ex-dividend date.
Investors who want to capture dividends should focus on names they want to own and buy them on a regular basis as the price action allows.
Sysco Delivers More than Food
Sysco Corporation delivers more than food. It offers value and dividends for shareholders. The company has a long history of dividend payments and distribution increases that make it a great choice for buy-and-hold and income investors. The SYY dividend is Dividend King quality and held by institutions and analysts.
Does Sysco pay a dividend?
Yes, Sysco stock does pay a dividend. The company has been paying a dividend for more than five decades and is a well-known dividend-grower as well.
Is Sysco a good stock to buy?
Sysco is a good stock to buy. It is a blue-chip operator in food services and fundamental to the global food service operation. It may not always be the right stock for every investor, or for every portfolio, so it's important to consider your own objectives.
Is Sysco a good dividend stock?
Sysco isn’t a good dividend stock — it’s a great dividend stock. The Sysco history has more than 50 years of dividend payments to its credit with more than 30 years of sustained, consecutive annual increases as well.
Companies Mentioned in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Sysco (SYY)||$86.23||-0.3%||2.27%||30.58||Moderate Buy||$92.00|