Companhia Brasileira de Distribuicao (NYSE: CBD) and SYSCO (NYSE:SYY) are both mid-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.

Risk and Volatility

Companhia Brasileira de Distribuicao has a beta of 1.84, meaning that its share price is 84% more volatile than the S&P 500. Comparatively, SYSCO has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Dividends

Companhia Brasileira de Distribuicao pays an annual dividend of $0.32 per share and has a dividend yield of 1.4%. SYSCO pays an annual dividend of $1.44 per share and has a dividend yield of 2.3%. Companhia Brasileira de Distribuicao pays out 103.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SYSCO pays out 65.8% of its earnings in the form of a dividend. Companhia Brasileira de Distribuicao has raised its dividend for 47 consecutive years. SYSCO is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Companhia Brasileira de Distribuicao and SYSCO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Companhia Brasileira de Distribuicao 0.64% 6.47% 1.97%
SYSCO 2.12% 58.47% 7.68%

Analyst Ratings

This is a summary of recent ratings and target prices for Companhia Brasileira de Distribuicao and SYSCO, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Companhia Brasileira de Distribuicao 0 0 2 0 3.00
SYSCO 0 5 7 0 2.58

SYSCO has a consensus price target of $58.40, indicating a potential downside of 5.16%. Given SYSCO’s higher possible upside, analysts clearly believe SYSCO is more favorable than Companhia Brasileira de Distribuicao.

Earnings and Valuation

This table compares Companhia Brasileira de Distribuicao and SYSCO’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Companhia Brasileira de Distribuicao $11.95 billion 0.52 -$138.18 million $0.31 74.74
SYSCO $55.37 billion 0.58 $1.14 billion $2.19 28.12

SYSCO has higher revenue and earnings than Companhia Brasileira de Distribuicao. SYSCO is trading at a lower price-to-earnings ratio than Companhia Brasileira de Distribuicao, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

3.3% of Companhia Brasileira de Distribuicao shares are owned by institutional investors. Comparatively, 80.1% of SYSCO shares are owned by institutional investors. 9.6% of SYSCO shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

SYSCO beats Companhia Brasileira de Distribuicao on 13 of the 17 factors compared between the two stocks.

About Companhia Brasileira de Distribuicao

Companhia Brasileira de Distribuicao, directly or through its subsidiaries, is engaged in the retail of food, clothing, home appliances, electronics and other items through its chain of hypermarkets, supermarkets, specialized stores and department stores principally under the trade names Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Super, Minimercado Extra, Assai an the neighborhood shopping mall brand Conviva. The Company’s segments include Retail, and Cash and carry segment. The Company’s Retail segment includes the banners Pao de Acucar, Minuto Pao de Acucar, Extra Hiper, Extra Supermercado, Minimercado Extra, Posto Extra, Drogaria Extra and GPA Malls & Properties. Its Cash & Carry segment includes the brand Assai. The Company is engaged in operations of retail stores located in approximately 20 states and the Federal District of Brazil.

About SYSCO

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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