Contrasting Sysco (NYSE:SYY) and Ahold (OTCMKTS:ADRNY)

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

Volatility and Risk

Ahold has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Sysco has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Ahold	2.45%	16.64%	4.82%
Sysco	2.08%	95.05%	8.00%

Dividends

Ahold pays an annual dividend of €0.93 per share and has a dividend yield of 2.6%. Sysco pays an annual dividend of $2.20 per share and has a dividend yield of 2.8%. Ahold pays out 31.5% 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.

Analyst Recommendations

This is a summary of recent ratings for Ahold and Sysco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ahold	0	4	0	1	2.40
Sysco	1	6	9	0	2.50

Sysco has a consensus target price of $90.17, indicating a potential upside of 14.17%. Given Sysco’s stronger consensus rating and higher possible upside, analysts plainly believe Sysco is more favorable than Ahold.

Valuation & Earnings

This table compares Ahold and Sysco”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ahold	$104.46 billion	0.30	$2.56 billion	€2.95	12.01
Sysco	$84.55 billion	0.46	$1.76 billion	$3.66	21.58

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

Institutional and Insider Ownership

0.2% of Ahold shares are owned by institutional investors. Comparatively, 83.4% of Sysco shares are owned by institutional investors. 0.6% of Sysco shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Sysco beats Ahold on 13 of the 18 factors compared between the two stocks.

About Ahold

Koninklijke Ahold Delhaize N.V. operates retail food stores and e-commerce in the United States, Europe, and internationally. The company's stores offer produce, dairy, meat, deli, bakery, seafood, and frozen products; grocery, beer, and wine; floral, pet food, health and beauty care, kitchen and cookware, gardening tools, general merchandise articles, electronics, newspapers and magazines, tobacco, etc.; gasoline; and pharmacy products. It operates its supermarkets, convenience stores, and online stores under the Food Lion, Stop & Shop, The GIANT Company, Hannaford, Giant Food, FreshDirect, Albert Heijn, bol.com, Etos, Gall & Gall, Delhaize, Albert, Alfa Beta Vassilopoulos, Mega Image, Delhaize Serbia, Peapod Digital labs, and Retail Business Service brands. The company was formerly known as Koninklijke Ahold N.V. and changed its name to Koninklijke Ahold Delhaize N.V. in July 2016. Koninklijke Ahold Delhaize N.V. was founded in 1867 and is headquartered in Zaandam, the Netherlands.

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.