Analyzing Weis Markets (WMK) and Sysco Corporation (SYY)
Weis Markets (NYSE: WMK) and Sysco Corporation (NYSE:SYY) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.
Earnings and Valuation
This table compares Weis Markets and Sysco Corporation’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Weis Markets||$3.40 billion||0.35||$173.90 million||$3.05||14.53|
|Sysco Corporation||$55.37 billion||0.50||$3.14 billion||$2.09||24.95|
Sysco Corporation has higher revenue and earnings than Weis Markets. Weis Markets is trading at a lower price-to-earnings ratio than Sysco Corporation, indicating that it is currently the more affordable of the two stocks.
Weis Markets pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. Sysco Corporation pays an annual dividend of $1.32 per share and has a dividend yield of 2.5%. Weis Markets pays out 39.3% of its earnings in the form of a dividend. Sysco Corporation pays out 63.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Weis Markets has raised its dividend for 46 consecutive years. Weis Markets is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Weis Markets and Sysco Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
32.0% of Weis Markets shares are held by institutional investors. Comparatively, 78.8% of Sysco Corporation shares are held by institutional investors. 26.9% of Weis Markets shares are held by insiders. Comparatively, 8.8% of Sysco Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Weis Markets and Sysco Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sysco Corporation has a consensus target price of $56.09, indicating a potential upside of 7.58%. Given Sysco Corporation’s higher possible upside, analysts plainly believe Sysco Corporation is more favorable than Weis Markets.
Risk & Volatility
Weis Markets has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Sysco Corporation has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.
Sysco Corporation beats Weis Markets on 9 of the 16 factors compared between the two stocks.
About Weis Markets
Weis Markets, Inc. is engaged principally in the retail sale of food in Pennsylvania and surrounding states. The Company’s retail food stores sell groceries, dairy products, frozen foods, meats, seafood, fresh produce, floral, pharmacy services, deli products, prepared foods, bakery products, beer and wine, fuel and general merchandise items, such as health and beauty care and household products. As of December 31, 2016, it had owned and operated approximately 204 retail food stores. The majority of the Company’s stores are concentrated in central and northeast Pennsylvania, central Maryland, suburban Washington, District of Columbia and Baltimore regions and New York’s Southern Tier. As of December 31, 2016, it had operated four stores in Delaware, 50 stores in Maryland, five stores in New Jersey, nine stores in New York, 121 stores in Pennsylvania, 13 stores in Virginia and two stores in West Virginia, for a total of 204 retail food stores operating under the Weis Markets name.
About Sysco Corporation
Sysco Corporation (Sysco) is a distributor of food and related products primarily to the foodservice or food-away-from-home industry. The Company’s segments include Broadline, SYGMA and Other. The Broadline segment includes its Broadline operations located in the Bahamas, Canada, Costa Rica, Ireland, Mexico and the United States. Broadline operating companies distribute a full line of food products and a range of non-food products to both traditional and chain restaurant customers, hospitals, schools, hotels, industrial caterers and other venues where foodservice products are served. SYGMA operating companies distribute a full line of food products and a range of non-food products to certain chain restaurant customer locations. The Other segment includes the Company’s specialty produce; custom-cut meat operations; lodging industry segments; a company that distributes specialty imported products; a company that distributes to international customers, and Sysco Ventures platform.
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