Sysco Corp (SYY) remains a solid choice for investors looking for steady current income and long-term growth potential. While Sysco will never impress you with rapid growth or exciting technology, its business is stable no matter what the overall economy is doing.
Growth and Income
Analysts estimate that this Zacks #2 Rank stock will grow its earnings per share 15.0% per year over the long term. The stock also has a dividend yield of 3.3%.
Business
Sysco markets and distributes a range of food and related products primarily to the food service industry including restaurants, hospitals and nursing homes, schools and colleges, hotels and motels, and industrial caterers.
Fiscal Third-Quarter Results
The company reported sales of $8.9 billion, an increase of 2.4% from the year-ago quarter. Operating income was 6.6% year-over-year, and EPS climbed 10.5%. More important, the company’s EPS of $0.42 beat the Zacks Consensus Estimate by a penny.
The company noted that this was the first quarter since September 2008 in which it had year-over-year sales growth. Moreover, CEO Bill DeLaney said that Sysco’s “underlying business environment appears to be improving, as evidenced by both the case volume growth and easing of deflation that we realized as the quarter progressed.”
Estimates
Analysts slightly increased their estimates after Sysco reported results on May 3. In the last month, the Zacks Consensus Estimates for fiscal 2010 and 2011 have held steady at $1.96 and $2.06, respectively.
Read the May 6 commentary on Sysco Corp.
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