Sysco (NYSE: SYY) is practically the epitome of boring. The company distributes foodstuffs to hundreds of thousands of customers around the country so that those customers can chop, fry, cook, and put delicious meals in front of us when we go out to eat.

The company is a big dog in an even bigger industry, but it's neither a sexy industry nor one that promises scorching growth. On the flip side, though, Sysco's competitive position, scale, and industry make it a particularly safe and stable pick in a world where security seems to be AWOL. At the same time, Sysco's stock pays a none-too-shabby 3.6% dividend and has an enviable record of growing its payout.

But just how attractive is Sysco's current price? Well, let's take a closer look to see whether we've got ourselves a boring bargain.

It's a beautiful day in the neighborhood
One way to get an idea of what a stock might be worth is to check out how similar companies are valued. So let's take a look at how Sysco stacks up.

Company

Price / Forward Earnings

Total Enterprise Value / Trailing EBITDA

Price / Book Value

Trailing PEG

Sysco 14.3 7.9 4.2 1.4
Costco (Nasdaq: COST) 19.9 8.9 2.6 1.7
Kroger (NYSE: KR) 12.3 5.7 2.8 NM
McDonald's (NYSE: MCD) 16.3 10.8 6.2 1.7
Target (NYSE: TGT) 13.3 7.7 2.6 1.1
Walgreen (NYSE: WAG) 14 7.2 2.3 1.2
Yum! Brands (NYSE: YUM) 19.4 10.9 NM 1.9
Average 15.9 8.5 3.3 1.5

Source: Capital IQ, a Standard & Poor's company, and Yahoo! Finance. Average excludes Sysco. Yum! Brands' book value multiple excluded as a significant outlier.

Using each of those averages to back into a stock price for Sysco, and then taking the average across those results, we can come up with an estimated price-per-share a few pennies shy of $29. This would suggest today's price of just under $29 is a pretty fair price.

A comparable company analysis like this can sometimes raise as many questions as it answers though. For instance, is the entire group properly valued? A supposedly fairly valued -- or even overvalued -- stock among a bunch of other undervalued stocks may actually be an undervalued stock, and vice versa.

Additionally, it's very tough to find public companies that are truly comparable to Sysco. The group above is about as good as we're going to get -- they're all large, stable companies on the consumer side of the economy. However, the branded restaurant sales from McDonald's and Yum! Brands are significantly different from the food distribution business at Sysco. Likewise, the store networks and consumer-facing operations at the rest of the group set them apart from Sysco as well.

So with all that in mind, it's best to combine comparable company analysis with another valuation technique.

Collecting the cash flow
An alternate way to value a stock is to do what's known as a discounted cash flow (DCF) analysis. Basically, this method projects free cash flow over the next 10 years and discounts the tally from each of those years back to what it would be worth today (since a dollar tomorrow is worth less to us than a dollar today).

Because a DCF is based largely on estimates (aka guesses) and it attempts to predict the future, it can be a fickle beast and so its results are best used as guideposts rather than written-in-stone answers sent down from Mount Olympus.

For Sysco's DCF, I used the following assumptions:

2011 Unlevered Free Cash Flow: $815 million
FCF Growth 2011-2015: 10.5%
FCF Growth 2015-2020: 5.3%
Terminal Growth: 3%
Market Equity as % of Total Capitalization: 87%
Cost of Equity: 12%
Cost of Debt: 5.5%
Weighted Average Cost of Capital: 10.9%

Source: Capital IQ, a Standard & Poor's company, Yahoo! Finance, author's estimates.

While most of this is pretty standard fare when it comes to DCFs, the academically inclined would probably balk at the way I set the cost of equity. In a "classic" DCF, the cost of equity is set based on an equation that uses beta -- a measure of how volatile a stock is versus the rest of the market -- and a few other numbers that I tend to thumb my nose at.

But when you get right down to it, the cost of equity is the rate of return that investors demand to invest in the equity of that company. So I generally set the cost of equity equal to the rate of return that I'd like to see from that stock.

Based on the assumptions above, a simple DCF model spits out a per-share value of just about $21 for Sysco's stock. This seems to suggest that the stock is currently overvalued.

Do we have a winner?
The valuations that we've done here are pretty simple and, particularly when it comes to the DCF, investors would be well advised to play with the numbers further before making a final decision on Sysco's stock.

That said, the price range that we've come up with, $21 to $29, seems to show that Sysco's stock isn't much of a bargain right now. However, recall above that I used 12% as my cost of equity (aka my required rate of return). For investors who are willing to accept a lower rate of return in exchange for Sysco's security and stability, the current price looks more attractive.

I am actually part of that latter camp. Though I generally aim for higher returns than I currently see in Sysco, I've added it to my own portfolio as a high-quality company that I can sleep easy owning and will provide me with a reliable stream of dividends. And if Mr. Market goes a little crazy and gives me the opportunity to snap up shares at a lower price in the future, well, I'd certainly be on board for that.

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Costco and Sysco are Motley Fool Inside Value picks. Costco is a Motley Fool Stock Advisor selection. Sysco is a Motley Fool Income Investor choice. The Fool owns shares of Costco, Sysco, and Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer owns shares of Sysco and McDonald's, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.