Tomahawk, WI 12/10/2013 (BasicsMedia) – SYSCO Corporation (NYSE:SYY) made an announcement on Monday, December 9, of an agreement to obtain US Foods in a deal that has an enterprise value of about $8.2 billion. This deal includes the assumption of debt and is a major reason why investors in the company can remain bullish on the company’s shares. The stocks of the company are on an upward trend and this can broadly be interpreted into balanced buying for long term investors.

Wonderful Growth Strategy

SYSCO Corporation (NYSE:SYY) achieved a higher value for its stock on the day of this announcement and is now up 8.19 at $42.50 signaling a new high for the year. This merger is evidence of the fact that the two companies are consolidating to create the best and to provide their customers with quality service. The company has a wonderful growth strategy and is making efforts at reducing costs while also enhancing efficiency although of major concern is the company’s spiraling costs which might be harmful to profit margins.

SYSCO Corporation (NYSE:SYY) Receives Upgrade

When the acquisition of US Foods is completed, 87 million shares will belong to equity holders of US foods and this represents 13% of SYSCO Corporation (NYSE:SYY). President and CEO of SYY Bill DeLaney will be the chief administrator of the amalgamated company. DeLaney commented about the acquisition saying that it is transformational and positions the company to considerably make advancements in attaining the company’s vision. The company currently holds a market capital of $20.16 billion and their dividends are expected to increase. The announcement that analysts Zacks had promoted the company’s shares from an underperform rating to a neutral rating is good news to investors.

There have been mixed signals through from analysts with the stocks receiving a sell rating from five, a hold rating from seven and a buy rating from two. This places an average rating of hold on the company and gives it a consensus target of $32.17. SYSCO Corporation (NYSE:SYY) did however beat the earnings consensus rating because it had revenue of $11.70 billion while the estimates had made a calculation of $11.62 billion. The company’s board of directors authorized a 3.6% rise in quarterly cash dividends to $0.29 per share from the present $0.28 which will be paid to on January 24, 2014.

Changes in Management

Going forward, there are some developments that are worth noting within the company. Manuel A. (Manny) Fernandez, Executive Chairman of the board of directors stepped down at the company’s Annual shareholders gathering. A new appointment was made with Jackie M. Ward taking over as the Non-Executive Chairperson of the board. In the current fiscal year, financial observers are of the view that the company will post $1.84 EPS. Over the past 30 days, the company has had an average volume of 3.7 million shares on a daily basis. SYSCO Corporation (NYSE:SYY) has a very solid financial position and a debt degree that is reasonable and an increase in the prices of stock in the past year and its return on equity is noteworthy.

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