The food industry is a mature but stable industry. Competition is intense, and companies tend to work on thin margins. However, the larger companies tend to benefit from competitive advantages like economies of scale and a strong brand. Usually, these sorts of companies are consumer-facing. There are, however, other participants within the food industry that work in the business-to-business space. They are suppliers to restaurants and other commercial establishments. Sysco Corporation is one such company. It provides food supplies, kitchen equipment, and small wares to educational centers, healthcare facilities, restaurants, and other entities. While the restaurant business had a tough time over the last 12-18 months, healthcare facilities and wholesale companies like Sodexo have been going about their business. If you are an investor looking to buy best food company stocks now, then companies like Sysco Corporation are worth analyzing further.
Sysco Corporation – A Food Distribution Major
Sysco Corporation was founded in 1969, which is about half a century ago. It has been around for decades and has grown to become the largest broadline food distributor in the world. The word Sysco is an acronym for Systems and Services Company. It has over 600,000 clients from a variety of industries. So, its client base is quite diversified. Sysco is headquartered in Houston, Texas. Houston is known for housing several oil majors and some of the largest companies in the world. Sysco is one of the largest non-oil-related businesses based out of Houston. Sysco’s size and clout were the subject of discussion in 2013 when Sysco attempted to acquire US Foods, another large food distributor. The Federal Trade Commission challenged the deal as it would have seen Sysco control 75% of the US food service industry. The deal was eventually terminated. For investors, however, Sysco continues to rank among the notable food company stocks 2021.
Sysco Corporation’s stock trades on the New York stock exchange under the ticker symbol SYY. The stock closed at $73.52 on 5th August 2021. At the time, it was trading at a 2.56% dividend yield.