Investing isn't easy. Even Warren Buffett counsels that most investors should invest in a low-cost index like the S&P 500. That way, "you'll be buying into a wonderful industry, which in effect is all of American industry," he says.
But there are, of course, companies whose long-term fortunes differ substantially from the index. In this series, we look at how individual stocks have performed against the broad S&P 500.
Step on up, Sysco (NYSE:SYY).
Sysco shares have outperformed the S&P 500 over the past quarter-century. By quite a bit, too:
Since 1987, shares have returned an average of 13.3% a year, compared with 9.7% a year for the S&P (both include dividends). One thousand dollars invested in the S&P in 1987 would be worth $19,200 today. In Sysco, it'd be worth $54,600.
Dividends accounted for a lot of those gains. Compounded since 1987, dividends have made up 38% of Sysco's returns. For the S&P, dividends account for 39% of total returns.
Now have a look at how Sysco earnings compare with S&P 500 earnings:
Great outperformance here, too. Since 1995, Sysco's earnings per share have increased by an average of 11.2% per year, compared with 6% a year growth for the broader index.
What's that meant for valuations? Sysco has traded for an average of 23 times earnings since 1987 -- just below the 24 times earnings for the broader S&P 500.
Through it all, shares have been strong performers over the past quarter-century.
Of course, the important question is whether that will continue. That's where you come in. Our CAPS community currently ranks Sysco with a five-star rating (out of five). Care to disagree? Leave your thoughts in the comment section below, or add Sysco to My Watchlist.