US Foods Holding Corp. (USFD)

US Foods delivers food to restaurants and canteens — the second largest foodservice wholesaler.

It suits a restaurant to take everything from one supplier: meat, vegetables, crockery and napkins arrive on one lorry to a schedule. The company earns on purchasing scale and route density — the more customers on one run, the cheaper each delivery.

Margins are thin, so the result turns on logistics and the share of own-label goods, which are more profitable than outside brands. A distinct bet is small independent restaurants: they are less attractive by volume but pay more per item and negotiate less than chains. Risks: food inflation, fuel and driver shortages. The company pays no dividend but buys back stock.