Critical Contrast: Associated British Foods (OTCMKTS:ASBFY) versus Sysco (NYSE:SYY)

Associated British Foods (OTCMKTS:ASBFY) and Sysco (NYSE:SYY) are both large-cap consumer staples companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Associated British Foods and Sysco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Associated British Foods	2	3	0	1	2.00
Sysco	0	5	10	0	2.67

Sysco has a consensus price target of $90.31, suggesting a potential upside of 5.71%. Given Sysco’s stronger consensus rating and higher possible upside, analysts clearly believe Sysco is more favorable than Associated British Foods.

Dividends

Associated British Foods pays an annual dividend of $0.96 per share and has a dividend yield of 3.9%. Sysco pays an annual dividend of $2.16 per share and has a dividend yield of 2.5%. Sysco pays out 58.1% of its earnings in the form of a dividend. Sysco has raised its dividend for 57 consecutive years.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Associated British Foods	$25.41 billion	0.69	$1.34 billion	N/A	N/A
Sysco	$81.37 billion	0.50	$1.83 billion	$3.72	22.97

Sysco has higher revenue and earnings than Associated British Foods.

Volatility and Risk

Associated British Foods has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Sysco has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Associated British Foods	N/A	N/A	N/A
Sysco	2.17%	109.21%	8.24%

Insider & Institutional Ownership

83.4% of Sysco shares are held by institutional investors. 0.6% of Sysco shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Sysco beats Associated British Foods on 11 of the 16 factors compared between the two stocks.

About Associated British Foods

Associated British Foods plc operates as a diversified food, ingredients, and retail company worldwide. It operates through five segments: Grocery, Ingredients, Agriculture, Sugar, and Retail. The Grocery segment manufactures and sells grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread and baked goods, cereals, ethnic foods, and meat products to retail, wholesale, and foodservice businesses. The Ingredients segment manufactures bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts, and cereal specialties. The Agriculture segment manufactures and sells animal feeds; and provides other products and services for the agriculture sector. The Sugar segment is involved in growing, processing, and selling sugar beet and sugar cane to industrial users. The Retail segment is involved in buying and merchandising clothing and accessories through the Primark and Penneys retail chains, which offer women's, men's, and kids wear, as well as beauty, homeware, and accessories. The company was incorporated in 1934 and is headquartered in London, the United Kingdom. Associated British Foods plc operates as a subsidiary of Wittington Investments Limited.

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.