Head to Head Review: Sysco (NYSE:SYY) and Pilgrim's Pride (PPC)

Sysco (NYSE: SYY) and Pilgrim's Pride (NASDAQ:PPC) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, profitability, institutional ownership, dividends and risk.

Volatility & Risk

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Sysco has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500. Comparatively, Pilgrim's Pride has a beta of 0.19, indicating that its share price is 81% less volatile than the S&P 500.

Earnings and Valuation

This table compares Sysco and Pilgrim's Pride’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sysco $55.37 billion 0.57 $1.14 billion $2.48 24.40
Pilgrim's Pride $10.77 billion 0.55 $694.57 million $2.89 8.26

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

Profitability

This table compares Sysco and Pilgrim's Pride’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sysco 2.10% 61.02% 7.78%
Pilgrim's Pride 7.08% 49.74% 14.56%

Dividends

Sysco pays an annual dividend of $1.44 per share and has a dividend yield of 2.4%. Pilgrim's Pride does not pay a dividend. Sysco pays out 58.1% of its earnings in the form of a dividend. Sysco has increased its dividend for 47 consecutive years.

Analyst Recommendations

This is a summary of current recommendations and price targets for Sysco and Pilgrim's Pride, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sysco 0 5 6 0 2.55
Pilgrim's Pride 0 5 2 0 2.29

Sysco presently has a consensus price target of $64.40, indicating a potential upside of 6.43%. Pilgrim's Pride has a consensus price target of $29.25, indicating a potential upside of 22.49%. Given Pilgrim's Pride’s higher probable upside, analysts clearly believe Pilgrim's Pride is more favorable than Sysco.

Institutional and Insider Ownership

79.0% of Sysco shares are held by institutional investors. Comparatively, 25.1% of Pilgrim's Pride shares are held by institutional investors. 9.6% of Sysco shares are held by insiders. Comparatively, 78.8% of Pilgrim's Pride shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Sysco beats Pilgrim's Pride on 11 of the 17 factors compared between the two stocks.

About Sysco

Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry in the United States, Canada, Bahamas, Mexico, Costa Rica, Panama, the United Kingdom, France, Sweden, Ireland, Belgium, Spain, and Luxembourg. It operates through three segments: U.S. Foodservice Operations, International Foodservice Operations, and SYGMA. The company distributes a line of frozen foods, such as meats, seafood, fully prepared entrees, fruits, vegetables, and desserts; a line of canned and dry foods; fresh meats and seafood; dairy products; beverage products; imported specialties; and fresh produce. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of China and silverware; cookware, which include pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing homes, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues through 324 distribution facilities. Sysco Corporation was founded in 1969 and is headquartered in Houston, Texas.

About Pilgrim's Pride

Pilgrim’s Pride Corporation is a retail feed store. It is a producer and seller of chicken with operations in the United States, Mexico and Puerto Rico. It is engaged in the production, processing, marketing and distribution of fresh, frozen and value-added chicken products to retailers, distributors and foodservice operators. It offers a range of products to its customers through national and international distribution channels. Its fresh chicken products consist of refrigerated (non-frozen) whole chickens, whole cut-up chickens and selected chicken parts that are either marinated or non-marinated. Its prepared chicken products include ready-to-cook and individually frozen chicken parts, strips, nuggets and patties, some of which are either breaded or non-breaded and either marinated or non-marinated. As of December 25, 2016, the Company marketed its portfolio of fresh, prepared and value-added chicken products across the United States, Mexico and in approximately 80 other countries.

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