Dividend Aristocrat Overview: Sysco Corporation

Photo: Flickr.com/karen_2873

About Sysco Corporation

Sysco Corporation is the global leader in the distribution of food and food related products to customers around the world. These customers include restaurants, hotels and motels, schools and colleges, industrial caterers, and healthcare facilities that prepare meals away from home. Sysco’s business is divided into two primary operating segments: Broadline operating companies, which represents about 80% of sales, distributes food and food related products to Sysco’s customers, and SYGMA operating companies, representing about 5% of sales, focuses on supplying chain restaurant locations. The remaining 5% of sales comes from other smaller segments, including specialty produce companies and lodging industry products companies. The specialty produce segment distribute fresh produce and the lodging industry products segment provides personal care guest amenities, housekeeping supplies and other hotel and motel supplies to the lodging industry. In total, Sysco’s 48,000 employees supply over 400,000 products to the company’s 425,000 customers.

The company is a member of the S&P 500 index and trades under the ticker symbol SYY.

Sysco Corporation’s Dividend and Stock Split History

Sysco Dividends

After growing dividends by more than 10% a year for more than 30 years, Sysco has recently slowed dividend growth.

Sysco Corporation has paid dividends since coming public in 1970 and has increased dividends at least annually since 1977. In 2001 Sysco met the Dividend Aristocrat criteria of 25 consecutive years of increasing regular dividend payments. Sysco has announced dividend increases in the first quarter of the calendar year. I expect Sysco to announce their next dividend increase in November and to pay out the new dividend in January 2017.

While Sysco has a decent long-term record of dividend growth, recently the dividend increases have been fairly small. Since 2010, the company has increased the dividend by 4 cents a year. At the beginning of 2016, Sysco increased the quarterly dividend by 3.3%, from 30 cents to 31 cents. This has resulted in a 5-year compounded dividend growth rate of 3.58%. Prior to 2010, Sysco Corporation had increased dividends by double-digit percentages in 32 of 33 years. This excellent dividend growth history results in a 10-year and 20-year CADGR of 6.51% and 11.94%, respectively. Over 25 years, Sysco has compounded its dividend an average of 15.31% a year.

Sysco has split its stock nine times since coming public in 1970. In February 1973, Sysco stock split 5-for-4, followed by 3-for-2 splits in June 1979 and December 1980. Since then, Sysco stock has split 2-for-1 six more times: in May 1982, March 1986, October 1989, June 1992, March 1998, and December 2000.

Direct Purchase and Dividend Reinvestment Plans

Sysco has both direct purchase and dividend reinvestment plans.  Investors interested in participating in either of these plans can find information at Sysco’s trustee agent, American Stock Transfer & Trust Company.  If you are interested, you must invest a minimum of $100 per cash or direct debit purchase.

There are no fees on any dividend reinvestments.  For direct purchases, there is a service fee of $2.50 plus 5 cents per share.  If you sell your shares in the plan, you’ll pay $10 plus 5 cents per share.  You can minimize your fees by buying and selling shares in larger quantities.

Helpful Links

Sysco Corporation’s Investor Relations Website

Current quote and financial summary for Sysco Corporation (finviz.com)

Information on the direct purchase and dividend reinvestment plans for SYY


Share this post:

Recent Posts