What analysts say:
- Buy, sell, or waffle? The nine analysts following Sysco give it two buys and seven holds.
- Revenues. On average, the analysts expect to see 7.5% sales growth to $9.15 billion.
- Earnings. Profits are predicted to rise 12% to $0.46 per share.
What management says:
Buybacks are the big news at Sysco this quarter. In June, the firm contracted with Wachovia
More interesting than the buybacks, perhaps, is a small snippet contained in the same release describing the bigger buyback. Sysco has amended its bylaws to add several ethical strictures, and the one I keyed in on was a new Section 9 on "Foreign Corrupt Practices and Anti-Bribery." It essentially codifies the provisions of the U.S. Foreign Corrupt Practices Act and the similar OECD Convention, and it forbids Sysco directly or indirectly bribing foreign officials in order to, for example, win contracts abroad. Why is this interesting? Primarily because Sysco currently gets more than 90% of its revenues from U.S. sources -- but its foreign operations are expanding, with 7.5% of revenues originating in Canada in 2004, 8% in 2005, and 8.5% in 2006. Anybody see a trend here?What management does:
Another trend of note concerns Sysco's margins, which are rising slowly but steadily at the gross and net levels. Meanwhile, operating margins remain remarkably consistent -- holding firm at 5% for a whole year now. Finally, at all three levels -- gross, operating, and net -- Sysco beats its primary publicly traded rival, Performance Food Group
One Fool says:
Numbers like those you see above led Motley Fool Income Investor lead analyst James Early to call Sysco "one of the highest quality firms in the market today" and "a compelling value." That high praise has led to two recommendations from the newsletter service. According to James, this restaurant supplier offers dividend-hungry investors "excellent long-term demographics, superior management, a fast-growing dividend, and significant capital appreciation potential."
Find out what facts underlie these conclusions when you try out Income Investor for 30 full days, absolutely free.Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.