Head-To-Head Comparison: Sysco (NYSE:SYY) vs. PriceSmart (NASDAQ:PSMT)

Sysco (NYSE:SYY) and PriceSmart (NASDAQ:PSMT) are both consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Dividends

Sysco pays an annual dividend of $2.20 per share and has a dividend yield of 2.7%. PriceSmart pays an annual dividend of $1.40 per share and has a dividend yield of 0.8%. Sysco pays out 60.1% of its earnings in the form of a dividend. PriceSmart pays out 26.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Sysco has raised its dividend for 57 consecutive years and PriceSmart has raised its dividend for 4 consecutive years. Sysco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Sysco has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, PriceSmart has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Profitability

This table compares Sysco and PriceSmart’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sysco	2.08%	95.05%	8.00%
PriceSmart	2.82%	12.16%	6.67%

Analyst Ratings

This is a breakdown of recent ratings for Sysco and PriceSmart, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sysco	1	6	9	0	2.50
PriceSmart	0	0	2	0	3.00

Sysco presently has a consensus price target of $89.50, suggesting a potential upside of 9.06%. PriceSmart has a consensus price target of $198.00, suggesting a potential upside of 16.81%. Given PriceSmart’s stronger consensus rating and higher possible upside, analysts clearly believe PriceSmart is more favorable than Sysco.

Insider and Institutional Ownership

83.4% of Sysco shares are owned by institutional investors. Comparatively, 80.5% of PriceSmart shares are owned by institutional investors. 0.6% of Sysco shares are owned by insiders. Comparatively, 17.0% of PriceSmart shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Sysco and PriceSmart”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sysco	$84.55 billion	0.46	$1.76 billion	$3.66	22.42
PriceSmart	$5.27 billion	0.99	$147.89 million	$5.21	32.54

Sysco has higher revenue and earnings than PriceSmart. Sysco is trading at a lower price-to-earnings ratio than PriceSmart, indicating that it is currently the more affordable of the two stocks.

Summary

PriceSmart beats Sysco on 9 of the 17 factors compared between the two stocks.

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.

About PriceSmart

PriceSmart, Inc. owns and operates U.S.-style membership shopping warehouse clubs in the United States, Central America, the Caribbean, and Colombia. The company provides basic and private label consumer products under the Member's Selection brand, including groceries, cleaning supplies, health and beauty aids, meat, produce, deli, seafood, and poultry. It offers electronics, large and small appliances, automotive, hardware, sporting goods, seasonal products, clothing, domestics, and home furnishing products. In addition, the company offers food and bakery services, as well as health services, such as optical, audiology, and pharmacy. Further, it operates an e-commerce platform for online ordering, curbside pickup, and delivery services. PriceSmart, Inc. was incorporated in 1994 and is headquartered in San Diego, California.