Tuesday, September 23, 2014

Dividends & Income Sysco sybmol SYY update

English: A Navistar International truck operat...
English: A Navistar International truck operated by Sysco docked at Duke Hospital South in Durham, North Carolina. (Photo credit: Wikipedia)
Sysco symbol SYY wants to merge with United Foods.  WSJ has an article about it today.

Their combined company would own about 25% of the market for food distributors.  Of course the government worries about these types of mergers.

As an income investor I do not think SYY's merger will jeopardize the dividend but it may cause the stock price to be rocky.

SYY was a 2013 Dividend Machine http://www.themoneymadam.com/2013/03/syy-dividend-machine-for-march-12-2013.html.  Today it does not quite qualify as the yield is only 3%.  But on every other level it is still a good income investment. 

As boring as a good distributor may be, SYY has a nice call today.    This November $40 call expires after the next dividend date so you would pocket both the call premium and the dividend.  See the table below for details.