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What Sysco's Earnings Mean for Mutual Fund Investors (SYY)

Shauna O'Brien Feb 02, 2015

Sysco (SYY) released its second quarter earnings report before the opening bell on Monday. Here’s what the results mean for mutual fund investors.

Inside SYY’s Results

Earnings

The company reported net income of $158 million, or 27 cents per share, down from $210.84 million, or 36 cents per share, last year. Adjusted earnings were 41 cents per share – matching analysts’ estimate of 41 cents per share.

Revenue
Sales increased 7.6% to $12.1 billion from $11.24 billion last year. Analysts expected to see revenue of $11.93 billion.

All Eyes on US Foods Merger

Sysco could be a target name for a conservative investors seeking a defensive stock with an attractive yield over 3%. From a valuation standpoint, the stock is trading at 20x 2015 earnings estimates, which is a bit toward the high end of its range. Investors should also take the company’s pending merger with US Foods into consideration, as SYY will need time to integrate such a large acquisition.

Mutual Funds to Watch

Investors interested in SYY may also consider a mutual fund as an alternative to owning the individual stock. The funds below currently hold the largest stakes in SYY.

Symbol	Mutual Fund	Stake
YACKX	AMG Yacktman Service	1.68%
YAFFX	AMG Yacktman Focused Service	1.08%
VTSMX	Vanguard Total Stock Mkt Idx	0.53%

The Bottom Line

The funds listed above allow investors to gain exposure to Sysco while remaining diversified. Investors interested in SYY may also be interested in United Natural Foods (UNFI).