Comparing Sysco (NYSE:SYY) & Metro (OTCMKTS:MTRAF)

Metro (OTCMKTS:MTRAF) and Sysco (NYSE:SYY) are both large-cap consumer staples companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and price targets for Metro and Sysco, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Metro	0	1	2	0	2.67
Sysco	1	6	9	0	2.50

Sysco has a consensus target price of $89.50, indicating a potential upside of 11.74%. Given Sysco’s higher probable upside, analysts plainly believe Sysco is more favorable than Metro.

Valuation and Earnings

This table compares Metro and Sysco”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Metro	$15.74 billion	0.86	$727.05 million	$3.04	21.42
Sysco	$84.55 billion	0.45	$1.76 billion	$3.66	21.89

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Metro	4.01%	14.23%	6.82%
Sysco	2.08%	95.05%	8.00%

Insider & Institutional Ownership

83.4% of Sysco shares are held by institutional investors. 0.6% of Sysco shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Metro pays an annual dividend of $1.18 per share and has a dividend yield of 1.8%. Sysco pays an annual dividend of $2.20 per share and has a dividend yield of 2.7%. Metro pays out 38.8% of its earnings in the form of a dividend. Sysco pays out 60.1% 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 increased its dividend for 57 consecutive years. Sysco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Sysco beats Metro on 12 of the 16 factors compared between the two stocks.

About Metro

Metro Inc., through its subsidiaries, operates as a retailer, franchisor, distributor, and manufacturer in the food and pharmaceutical sectors in Canada. The company operates supermarkets, discount, neighborhood, and specialty stores that provide fresh and grocery products, baked goods, prepared food products, meats, dairy products, fruits and vegetables, frozen food products, bakery products, delicatessen items, and pastries. It also manufactures ready-to-eat meals, salads, dips, pastries, pies, breads, and cakes; generic drugs under Pro Doc trademark; and provides online grocery shopping services. In addition, the company offers its private label food products under Irresistibles, Selection, Our Harvest Best, Lucky Koi, Life Smart, Adonis, Phoenicia, and Premiere Moisson brands; and private label drug products comprising beauty and cosmetic products, over-the-counter medications, and personal care products, sold under the Personnelle brand name. It operates a network of food stores under various banners, including Metro, Metro Plus, Adonis, Super C, Marché Richelieu, Marché Ami, Première Moisson, Les 5 Saisons, and Food Basics, as well as drugstores primarily under the PJC Jean Coutu, PJC Santé, PJC Santé Beauté, Brunet, Brunet Plus, Brunet Clinique, Clini Plus, Metro Pharmacy, and Food Basics Pharmacy banners. The company was founded in 1947 and is headquartered in Montréal, Canada.

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.