Contrasting Sysco (NYSE:SYY) and Flowers Foods (NYSE:FLO)

Flowers Foods (NYSE:FLO) and Sysco (NYSE:SYY) are both consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, analyst recommendations, earnings and risk.

Valuation and Earnings

This table compares Flowers Foods and Sysco”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flowers Foods	$5.10 billion	0.44	$248.12 million	$0.92	11.61
Sysco	$81.37 billion	0.43	$1.83 billion	$3.73	19.68

Sysco has higher revenue and earnings than Flowers Foods. Flowers Foods is trading at a lower price-to-earnings ratio than Sysco, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

75.5% of Flowers Foods shares are owned by institutional investors. Comparatively, 83.4% of Sysco shares are owned by institutional investors. 11.6% of Flowers Foods shares are owned by company insiders. Comparatively, 0.6% of Sysco shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Flowers Foods and Sysco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flowers Foods	3.78%	16.35%	5.65%
Sysco	2.21%	112.04%	8.32%

Risk and Volatility

Flowers Foods has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Sysco has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Flowers Foods and Sysco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flowers Foods	1	3	0	0	1.75
Sysco	0	6	9	0	2.60

Flowers Foods currently has a consensus target price of $13.67, suggesting a potential upside of 27.92%. Sysco has a consensus target price of $87.00, suggesting a potential upside of 18.50%. Given Flowers Foods’ higher probable upside, research analysts plainly believe Flowers Foods is more favorable than Sysco.

Dividends

Flowers Foods pays an annual dividend of $0.99 per share and has a dividend yield of 9.3%. Sysco pays an annual dividend of $2.16 per share and has a dividend yield of 2.9%. Flowers Foods pays out 107.6% 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 57.9% of its earnings in the form of a dividend. Flowers Foods has increased its dividend for 24 consecutive years and Sysco has increased its dividend for 57 consecutive years.

Summary

Sysco beats Flowers Foods on 12 of the 17 factors compared between the two stocks.

About Flowers Foods

Flowers Foods, Inc. produces and markets packaged bakery food products in the United States. Its principal products include fresh breads, buns, rolls, snack items, bagels, English muffins, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates bakeries. Its customers include national and regional restaurants, institutions and foodservice distributors, and retail in-store bakeries; wholesale distributors; mass merchandisers, supermarkets, vending outlets, and convenience stores; quick-serve chains, food wholesalers, institutions, dollar stores, and vending companies; and public health care, military commissaries, and prisons, and other governmental institutions. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.

About Sysco

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen food, such as meat, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry food products; fresh meat and seafood products; dairy products; beverages; imported specialties; and fresh produce products. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of glassware and silverware; cookware, such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.