What Sysco actually does

Sysco is the world’s largest foodservice distributor. It buys food, supplies and equipment from producers and delivers them to restaurants, hotels, hospitals, schools and other kitchens. A delivery truck full of ingredients for a restaurant is often one of its trucks.

How the business makes money

Sysco earns a small margin on a very large volume of goods. Its size lets it buy at better prices and run an efficient delivery network, and many customers rely on its sales representatives, ordering tools and product range, which keeps them coming back.

The dividend story

Sysco has raised its dividend for more than five decades and is a Dividend King. It pays quarterly. Because margins are thin, the company watches costs and works to improve efficiency to keep supporting the payout.

What to keep an eye on

  • Restaurant traffic. Less dining out means less demand.
  • Inflation and costs. Fuel, labor and food prices.
  • Competition. US Foods and Performance Food Group.
  • Debt. Acquisitions add borrowing.

Quick take

Sysco is an essential link in the food supply chain and a long-time dividend raiser, running on thin margins.