November 14, 2024
Top 10 Stock US Foods Strong Buy 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: US Foods – Top 10 Stock in S&P Food & Beverage Index
US Foods 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. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for US Foods on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Food Distributors |
| Index | S&P US Food & Beverage |
| 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 US Foods Strong Buy
| 360 METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 29 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 93 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 90 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 86 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 94 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock US Foods are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for US Foods. The consolidated Growth Rank has a good rank of 93, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 93% of competitors in the same industry. The consolidated Safety Rank at 90 means that the company has a financing structure that is safer than 90% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 86, which means that professional investors are more optimistic about the stock than for 86% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 29, meaning that the share price of US Foods is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 71% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, US Foods is better positioned than 94% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 93), a safe financing structure (Safety Rank of 90), and positive professional market sentiment (Sentiment Rank of 86), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of US Foods compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (93% better than peers). The value rank could be the reverse reflection of that (7%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for US Foods very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock US Foods is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for US Foods. Analyst Opinions are at a rank of 81 (better than 81% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 89, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in US Foods. Finally, the Professional Investors rank is 92, which means that currently, professional investors hold more stock in this company than in 92% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), US Foods has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 46, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 54% of competitors). This could mean future risks and should make investors careful. Attention to negative news for US Foods is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: US Foods Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), US Foods shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for US Foods. Price-to-Sales (P/S) is 66, which means that the stock price compared with what market professionals expect for future sales is lower than 66% of comparable companies, indicating a good value concerning to US Foods's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 1, meaning that dividends are expected to be lower than for 99% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 57% of alternatives (only 43% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 57% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a hold recommendation based on US Foods's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in US Foods could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, US Foods looks like an expensive investment today. ...read more
Growth Strategy: US Foods Growth Momentum high
| GROWTH METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 60 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 72 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 85 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 87 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 93 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2024, US Foods shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for US Foods. Sales Growth has a value of 60, which means that, currently, professionals expect the company to grow more than 60% of its competitors. The same is valid for Profit Growth with a value of 72 and for Capital Growth with 85. In addition, Stock Returns had an above-average rank value of 87, which means they have been higher than 87% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, US Foods exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: US Foods Debt Financing Safety very solid
| SAFETY METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 54 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 63 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 90 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 90 (better than 90% compared with alternatives) for 2024, the company US Foods has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of US Foods is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for US Foods. Leverage is at 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Refinancing is at a rank of 63, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Finally, Liquidity is also good at a rank of 94, which means that the company generates more profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 90 (better than 90% compared with alternatives), US Foods has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: US Foods Top Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 29 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 93 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 94 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 90 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), US Foods (Food Distributors, USA) shares have much better financial characteristics than comparable stocks. Shares of US Foods are low in value (priced high) with a consolidated Value Rank of 29 (worse than 71% of alternatives). But they show above-average growth (Growth Rank of 93) and are safely financed (Safety Rank of 90, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on US Foods's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company US Foods exhibits low value (Obermatt Value Rank of 29), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 93). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 90) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.