Last update on 2024-06-06

Sysco (SYY) - Piotroski F-Score Analysis for Year 2023 (Final Score: 9/9)

Sysco (SYY) shines with a perfect Piotroski F-Score of 9/9 in 2023, showcasing its robust financial health and promising investment potential.

Short Analysis - Piotroski Score: 9

We're running Sysco (SYY) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Sysco (SYY) achieved the highest Piotroski F-Score of 9, indicating a strong financial position. A positive net income, high cash flow from operations, and rising return on assets (ROA) illustrate robust profitability. Liquidity has improved with a growing current ratio, and financial health appears strong despite slight leverage increases. Effective management is reflected in share buybacks and rising gross margins. Asset utilization, shown by the asset turnover ratio, is also improving, sustaining high performance.

Insights for Value Investors Seeking Stable Income

Based on this analysis, Sysco (SYY) appears to be a solid investment option. The perfect Piotroski F-Score suggests it is financially strong, managing operations effectively, and maintaining good liquidity. Sysco has shown resilience with positive net income and strong cash flows even through past economic challenges. Investors seeking a reliable and potentially undervalued stock should consider looking into Sysco further.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Sysco (SYY)

Company has a positive net income?

The criterion examines whether the net income of Sysco is positive or negative, reflecting the company's profitability.

The net income for Sysco (SYY) in 2023 stands at $1,770,124,000, which is positive. Hence, we add 1 point according to the Piotroski score system. Evaluating the net income trend over the past 20 years reveals Sysco's resilience and capability to generate consistent profits, albeit with fluctuations. The 2020 dip to $215 million reflects the pandemic's impact, with subsequent recovery showcasing financial robustness. The latest figure, $1.77 billion, represents a strong post-pandemic recovery and signifies positive financial health.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is critical as it indicates the cash that a company generates or consumes from its regular business operations. A positive CFO signifies good liquidity and operating efficiency.

For the fiscal year 2023, Sysco (SYY) reported a positive Cash Flow from Operations (CFO) of $2,867,602,000. This is an encouraging indicator for the company, reflecting strong operational efficiency and robust liquidity. Over the last 20 years, Sysco has consistently maintained a positive CFO, albeit with some fluctuations. For instance, in 2010, the CFO dipped to $885,428,000 but has since showcased a general upward trend. The recent CFO figures represent the highest performance in two decades, suggesting a fortified cash generation capability from its core operations. This positive trend is beneficial as it ensures that the company has adequate cash flow to reinvest in the business, reduce debt, and ultimately drive shareholder value.

Return on Assets (ROA) are growing?

ROA measures a company's ability to generate profit from its assets.

In 2023, Sysco's ROA increased to 0.0788 from 0.0625 in 2022, indicating better asset utilization. However, it's still significantly below the industry median of 0.1527, suggesting room for improvement. This trend is positive but shows the company trailing behind its peers.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income

In 2023, Sysco's (SYY) Operating Cash Flow stands at $2,867,602,000, surpassing its Net Income of $1,770,124,000. This trend is positive, as having Operating Cash Flow higher than Net Income indicates strong cash management and is generally seen as a sign of the company's financial health. Over the past 20 years, Sysco's Operating Cash Flow and Net Income have shown a consistent pattern, notably with both metrics growing steadily in recent years, highlighting enduring operational robustness. Such a consistency implicates effective business operations translating earnings into actual cash, ultimately fostering greater shareholder value.

Liquidity of Sysco (SYY)

Leverage is declining?

Change in leverage assesses whether a company's financial risk is increasing or decreasing. A decrease in leverage indicates a reduction in risk due to lower debt levels.

In 2023, the leverage ratio for Sysco increased from 0.4846 in 2022 to 0.4822 in 2023. This suggests an uptick in the company's financial risk as it signifies higher debt levels relative to equity. Given that the Piotroski Score assigns a 0 in instances where leverage increases, Sysco earns 0 points for this criterion. Historically, Sysco's leverage has demonstrated significant variation, notably peaking in 2020 at 0.5933, reflecting increased financial risk during that period. Comparing recent years to historical data, while leverage has improved since its peak, the trend remains unfavorable for this specific financial measure.

Current Ratio is growing?

Current Ratio measures a company’s ability to pay short-term obligations with its short-term assets. An increasing Current Ratio implies improved liquidity and financial health, making it a crucial factor for investors looking at short-term solvency.

Comparing Sysco's (SYY) Current Ratio of 1.2421 in 2023 with 1.1981 in 2022, we see a positive increase. This uptick signifies improved liquidity for Sysco, suggesting that it is in a better position to cover its short-term liabilities than it was the previous year. This makes the company more financially stable in the short term, which is favorable for investors. Over the past 20 years, Sysco's Current Ratio has shown fluctuations but primarily stayed above the industry median, especially peaking at 2.2672 in 2016. The 0.044-point increase this year amidst such historical context is an encouraging sign.

Number of shares not diluted?

The change in shares outstanding reflects the company’s policy on equity dilution and buybacks. A decrease is typically positive.

In FY 2023, Sysco's outstanding shares decreased from 510,630,645 in 2022 to 507,362,913. This reduction indicates a share buyback program, suggesting a positive sentiment and confidence from the management. Enhanced investor value is suggested, earning Sysco 1 point for this criterion. Historically, the outstanding shares have shown a declining trend from 659,566,102 in 2003 to the current count, reinforcing consistent buyback practices.

Operating of Sysco (SYY)

Cross Margin is growing?

Change in Gross Margin is a critical criterion under Piotroski Analysis as it indicates the company's ability to sell its products profitably. A higher gross margin suggests better profitability and operational efficiency, contributing positively to the company's financial health.

Comparing Sysco's gross margin for 2023 (0.1828) with 2022 (0.1795), it is evident that the gross margin has increased. Thus, Sysco scores 1 point for this criterion. Also, analyzing the historical data, we see that Sysco's gross margin, while fluctuating, has generally been above the industry median, indicating a relatively strong competitive position. This recent increase is a positive indicator, suggesting improved cost management and pricing strategy.

Asset Turnover Ratio is growing?

Change in Asset Turnover considers how efficiently a company uses its assets to generate sales which impacts profitability.

Sysco's asset turnover ratio increased from 3.1557 in 2022 to 3.3992 in 2023, indicating improved efficiency in using its assets to generate revenue. This increase merits a point in the Piotroski F-Score model, reflecting a positive trend. Looking historically at the last 20 years, the asset turnover ratio peaked at 4.0445 in 2003 and hit a low of 2.3295 in 2021, rebounding since then. The current figure of 3.3992 is one of the higher values seen recently, suggesting a solid recovery. Overall, this positive trend is crucial for maintaining high asset utilization and profitability.