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Analyst Blog

In an effort to boost shareholders value, Sysco Corporation’s (SYY - Free Report) board of directors increased the quarterly dividend by 6% to 33 cents (or $1.32 annually) from the prior payout of 31 cents (or $1.24 annually). The increased dividend will be paid on Jan 27, to stockholders on record as of Jan 6, 2017.

This marks the 48th hike for the food company which has been paying dividends every quarter since 1970. The last hike of a cent or 3.3% was announced on Nov 18, 2015 and was paid on Jan 6, 2015.

We appreciate Sysco’s efforts to consistently enhance long-term shareholder value amid a volatile economy. Dividend hikes not only enhance shareholder returns but also raise the market value of the stock. Through this strategy, companies try to win investors and persuade them to either buy or hold the scrip instead of selling it.

Investors prefer an income generating stock and a dividend paying one is always a preferable option. People looking for regular income from stocks are most likely to choose companies that have a consistent and incremental dividend payout track.

This Zacks Rank #2 (Buy) company has a portfolio of businesses which comprise broadline, specialty meat, chain restaurant distribution, specialty produce, hotel amenities as well as specialty import and export which cater to customers across a wide array of business segments. Over the long term, the company targets a dividend payout of 40% to 50% of net earnings.

SYSCO CORP Price, Consensus and EPS Surprise

 

SYSCO CORP Price, Consensus and EPS Surprise | SYSCO CORP Quote

Stocks to Consider

Stocks which warrant a look in this sector include AdvancePierre Foods Holdings, Inc. (APFH - Free Report) , Lancaster Colony Corporation (LANC - Free Report) and Ingredion Incorporated (INGR - Free Report) . All these stocks carry the same rank as Sysco. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AdvancePierre Foods Holdings has an impressive long-term earnings growth rate of 13.8%.

Lancaster Colony shares have gained nearly 15% in the past six months.

Ingredion has long-term earnings growth rate of 11% and the company’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarter, with an average of 10.5%.

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