But some under-appreciated details could hold back shares. Sysco's cash flow has been boosted by an internal re-organization that puts its supply chain in a co-operative structure, one with a different fiscal year from the company. This lets Sysco defer certain tax payments, and its liabilities list about $1 billion under "deferred tax liability." This structure has since caught the eye of the IRS, and losing the tax advantage -- an answer is expected early 2009 -- could add $1 billion in debt. Bears also question the way Sysco has been increasing, since fiscal 2002, the number of years over which it depreciates certain assets, which lowers depreciation expenses and pads margins. True, even critics say Sysco might be worth, say, 18, which isn't far below its level today near 22.31. But Sysco could find it harder to grow profits amid food-cost inflation. It also isn't clear if Sysco will reap big benefits from tumbling energy prices, having hedged its 2009 fuel costs this summer when oil was near its peak. Finally, as Americans try to save a buck by eating at home and brown-bagging at work, restaurants, and even cafeterias, will feel the pinch. And so will their suppliers.

Investors are hungry for any morsel of positive news on the financial front. Sysco , the largest marketer and distributor of food-service products in the U.S. and Canada, obliged Wednesday by sweetening its common dividend 9%. The Houston company will now pay 24 cents a share quarterly, up from 22 cents, for a 4.43% yield. Disbursement is scheduled for Jan. 23 to holders of record Jan. 2, and the stock goes ex-dividend Dec. 30. "Annual dividend increases have been a consistent practice at Sysco [ticker: SYY] ever since we went public in 1970," noted Richard J. Schnieders, chief executive officer. In September, directors approved a 20-million-share repurchase program, Sysco's 15th buyback since fiscal 1992 (ended June 30). In fiscal 2008, the company spent $529 million to repurchase roughly 17 million of its shares. There are about three million remaining under the prior authorization. Sysco's stock was recently quoted at 21 and change on the Big Board. The shares set a 52-week high of 35 on Sept. 15 and are now trading at a 52-week low.

9%

Strategas screened for staple companies with net margins above three-year average, improving net operating cash flow, and reasonable price-to-sales ratios relative to the sector's average, and came up with names including Altria (MO), Kroger (KR), Sysco (SYY), H.J. Heinz (HNZ), Safeway (SWY), and Molson Coors Brewing (TAP).

food industry stable company

From a recent Mad Money show: "This is a food delivery company that sells to a lot of restaurants. It's well run and I want to buy Sysco right here."

From a recent Mad Money show: "At times managements can trump even the most difficult markets. This is a fabulously run company and I endorse it."

7/1/2008

He also likes Sysco (SYY) because it has a dominant distribution company serving the growing food-service industry: "Sysco is trading at a historically low valuation, given concerns related to the economy and consumer." He bought it at 33 last autumn; it's now below 28, but he believes its competitive positioning will lift it long term. Earnings are expected to grow to 1.78 a share in '08 and 1.98 in '09.

15.8%

cost me money

boring

Robot trade

overpriced. slow growth

excellent company but little gowth in the price of the stock

Gross operating profit dips to 1,653,489 from 1,759,276. Valuation is higher than S&P. On balance a great company. The safety of the food business makes the food sector more attractive than this indivudal stock. Bad house in an otherwise great neighborhood. Sell.

Fair dividend, consumer staple

Safe but sorry... it just underperforms and have to move my money elsewhere.

BIG COMPANY THAT IS HARD TO GROW.