Sysco (SYY) just made its biggest bet in years. On March 30, the largest U.S. foodservice distributor announced a $29.1 billion acquisition of Jetro Restaurant Depot, propelling it into the high-margin cash-and-carry channel serving smaller independent operators.
The deal instantly boosts Sysco’s scale but has triggered a sharp selloff. SYY stock plunged 15% intraday on March 30, marking the largest single-day percentage decline since the March 2020 Covid-19 crash.
Investors are focused on the downsides — $21 billion in new debt that will push leverage up from 2.9 times to roughly 4.5 times, 91.5 million new shares diluting owners by 19.1%, the sudden end to Sysco’s big buyback program, and S&P Global cutting the credit outlook to Negative. At the same time, Sysco still offers a solid annualized dividend of $2.16 per share, yielding around 3% at current prices, backed by 55-straight years of increases as a Dividend King.
Wall Street is nervous about all the debt and the risks of making this deal work. But with that steady payout, the big question is whether Sysco’s reliable dividend can sweeten what looks like a high-stakes gamble. Let’s take a closer look.
Headquartered in Houston, Texas, Sysco is the world’s largest food‑away‑from‑home distributor, selling and delivering food and related products to about 730,000 customer locations across restaurants, healthcare, education, lodging, and other institutional channels.
SYY stock trades near $72, down sharply from the 52-week high of $91.85. Shares are down about 2% year-to-date (YTD) and down 4% for the past 12 months. The stock has experienced significant volatility recently, with a 13% five-day decline largely attributable to the acquisition announcement, which sent shares reeling from a pre-deal close of $81.80.
SYY stock carries a forward price-to-earnings (P/E) ratio of 15 times, with a market capitalization of roughly $34.1 billion.
Sysco’s second-quarter fiscal 2026 results showed sales of $20.8 billion, reflecting 3% year-over-year (YOY) growth. U.S. Foodservice volume grew 0.8% overall and 1.2% locally, marking the third consecutive quarter of positive local case growth. Gross profit rose 3.9% to $3.8 billion, with margins expanding 15 basis points to 18.3%. Adjusted operating income increased 3.1% to $807 million, while adjusted net earnings grew 3.9% to $476 million. Adjusted EPS came in at $0.99, climbing 6.5% YOY, while adjusted EBITDA rose 3.3% to $1 billion.
