November 14, 2024
Top 10 Stock Sysco Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Sysco – Top 10 Stock in S&P Food & Beverage Index
Sysco is listed as a top 10 stock on November 14, 2024 in the market index S&P US Food & Beverage because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 40 (40% performer), Obermatt assesses an overall hold recommendation for Sysco on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Food Distributors |
| Index | Dividends USA, Employee Focus US, Diversity USA, S&P US Consumer, S&P US Food & Beverage, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Sysco Hold
| 360 METRICS | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 32 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 40 |
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ANALYSIS: With an Obermatt 360° View of 40 (better than 40% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sysco are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Sysco. The consolidated Value Rank has an attractive rank of 71, which means that the share price of Sysco is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 71% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 54, which means that professional investors are more optimistic about the stock than for 54% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 47, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 32, meaning the company has a riskier financing structure than 68 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 40, Sysco is worse than 60% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 71) and positive market sentiment in the professional investor community (Sentiment Rank of 54), but growth expectations are below-average (Growth Rank of 47) and the financing structure is on the risky side(Safety Rank of 32). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Sysco is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Sysco positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock Sysco is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Sysco. Analyst Opinions are at a rank of 63 (better than 63% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 70, which means that currently, professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 78 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 78% of competitors). But Analyst Opinions Change has a below-average rank of 11, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Sysco. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), Sysco has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Sysco Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), Sysco shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Sysco. Price-to-Sales (P/S) is 68, which means that the stock price compared with what market professionals expect for future sales is lower than for 68% of comparable companies, indicating a good value concerning Sysco's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 68% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 78 (dividends are expected to be higher than 78% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 93% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Sysco to 7. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on Sysco's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Sysco Growth Momentum low
| GROWTH METRICS | November 14, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 50 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 46 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 64 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 49 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
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ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Sysco shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sysco. Sales Growth has a rank of 50 which means that currently, professionals expect the company to grow more than 50% of its competitors. Capital Growth is also above 46% of competitors with a rank of 64. But Profit Growth only has a rank of 46, which means that currently professionals expect the company to grow its profits less than 54% of its competitors. And Stock Returns have also been below average with a rank of only 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Sysco Debt Financing Safety below-average
| SAFETY METRICS | November 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 62 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 32 |
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ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company Sysco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Sysco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Sysco. Refinancing is at 63, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Liquidity is also good at 62, meaning the company generates more profit to service its debt than 62% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 15, which means the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), Sysco has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Sysco could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Sysco Below-Average Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Sysco (Food Distributors, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Sysco are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives) but show below-average growth (Growth Rank of 47), and are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on Sysco's financial characteristics. As the company Sysco's key financial metrics exhibit good value (Obermatt Value Rank of 71) but low growth (Obermatt Growth Rank of 47) and risky financing practices (Obermatt Safety Rank of 32), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 71% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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