ARCHER-DANIELS-MIDLAND CO (ADM) Stock Fundamental Analysis
NYSE:ADM - New York Stock Exchange, Inc. - US0394831020 - Common Stock - Currency: USD
Overall ADM gets a fundamental rating of 4 out of 10. We evaluated ADM against 91 industry peers in the Food Products industry. ADM has only an average score on both its financial health and profitability. ADM is valued correctly, but it does not seem to be growing. Finally ADM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ADM was profitable.
In the past year ADM had a positive cash flow from operations.
ADM had positive earnings in each of the past 5 years.
Of the past 5 years ADM 4 years had a positive operating cash flow.
1.2 Ratios
ADM has a Return On Assets (2.56%) which is in line with its industry peers.
The Return On Equity of ADM (6.18%) is comparable to the rest of the industry.
The Return On Invested Capital of ADM (3.57%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for ADM is significantly below the industry average of 28.40%.
The 3 year average ROIC (7.66%) for ADM is well above the current ROIC(3.57%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.56% | ||
| ROE | 6.18% | ||
| ROIC | 3.57% |
ROA(3y)5.67%
ROA(5y)5.08%
ROE(3y)13.47%
ROE(5y)12.27%
ROIC(3y)7.66%
ROIC(5y)6.81%
1.3 Margins
ADM has a Profit Margin (1.63%) which is comparable to the rest of the industry.
ADM's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 1.92%, ADM is in line with its industry, outperforming 45.05% of the companies in the same industry.
ADM's Operating Margin has been stable in the last couple of years.
The Gross Margin of ADM (6.32%) is worse than 81.32% of its industry peers.
ADM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.92% | ||
| PM (TTM) | 1.63% | ||
| GM | 6.32% |
OM growth 3Y-12%
OM growth 5Y-1.08%
PM growth 3Y-12.83%
PM growth 5Y-0.27%
GM growth 3Y-1.29%
GM growth 5Y1.04%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ADM is destroying value.
ADM has less shares outstanding than it did 1 year ago.
ADM has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, ADM has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.93 indicates that ADM is not a great score, but indicates only limited risk for bankruptcy at the moment.
ADM's Altman-Z score of 2.93 is fine compared to the rest of the industry. ADM outperforms 67.03% of its industry peers.
The Debt to FCF ratio of ADM is 49.84, which is on the high side as it means it would take ADM, 49.84 years of fcf income to pay off all of its debts.
ADM has a Debt to FCF ratio of 49.84. This is comparable to the rest of the industry: ADM outperforms 51.65% of its industry peers.
A Debt/Equity ratio of 0.47 indicates that ADM is not too dependend on debt financing.
ADM's Debt to Equity ratio of 0.47 is in line compared to the rest of the industry. ADM outperforms 47.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 49.84 | ||
| Altman-Z | 2.93 |
ROIC/WACC0.35
WACC10.29%
2.3 Liquidity
ADM has a Current Ratio of 1.38. This is a normal value and indicates that ADM is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of ADM (1.38) is comparable to the rest of the industry.
A Quick Ratio of 0.81 indicates that ADM may have some problems paying its short term obligations.
The Quick ratio of ADM (0.81) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
The earnings per share for ADM have decreased strongly by -37.54% in the last year.
The Earnings Per Share has been growing by 12.32% on average over the past years. This is quite good.
ADM shows a decrease in Revenue. In the last year, the revenue decreased by -8.56%.
ADM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.76% yearly.
EPS 1Y (TTM)-37.54%
EPS 3Y-3.11%
EPS 5Y12.32%
EPS Q2Q%-52.05%
Revenue 1Y (TTM)-8.56%
Revenue growth 3Y0.11%
Revenue growth 5Y5.76%
Sales Q2Q%-7.65%
3.2 Future
The Earnings Per Share is expected to decrease by -0.45% on average over the next years.
Based on estimates for the next years, ADM will show a decrease in Revenue. The Revenue will decrease by -0.26% on average per year.
EPS Next Y-14.64%
EPS Next 2Y-1.73%
EPS Next 3Y0.72%
EPS Next 5Y-0.45%
Revenue Next Year-2.21%
Revenue Next 2Y0.23%
Revenue Next 3Y1.15%
Revenue Next 5Y-0.26%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 14.12, ADM is valued correctly.
70.33% of the companies in the same industry are more expensive than ADM, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.28. ADM is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 12.26, the valuation of ADM can be described as correct.
78.02% of the companies in the same industry are more expensive than ADM, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of ADM to the average of the S&P500 Index (21.76), we can say ADM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.12 | ||
| Fwd PE | 12.26 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADM.
ADM's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 120.98 | ||
| EV/EBITDA | 12.4 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.15
EPS Next 2Y-1.73%
EPS Next 3Y0.72%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.84%, ADM has a reasonable but not impressive dividend return.
ADM's Dividend Yield is rather good when compared to the industry average which is at 4.75. ADM pays more dividend than 80.22% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, ADM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.84% |
5.2 History
On average, the dividend of ADM grows each year by 7.05%, which is quite nice.
ADM has been paying a dividend for at least 10 years, so it has a reliable track record.
ADM has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.05%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
71.38% of the earnings are spent on dividend by ADM. This is not a sustainable payout ratio.
ADM's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP71.38%
EPS Next 2Y-1.73%
EPS Next 3Y0.72%
55.9
+1.45 (+2.66%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners84.05%
Inst Owner Change2.52%
Ins Owners0.6%
Ins Owner Change7.16%
Market Cap26.86B
Analysts52.63
Price Target49.98 (-10.59%)
Short Float %2.29%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.84% |
Yearly Dividend1.99
Dividend Growth(5Y)7.05%
DP71.38%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.85%
Min EPS beat(2)-1.69%
Max EPS beat(2)3.39%
EPS beat(4)1
Avg EPS beat(4)-6.95%
Min EPS beat(4)-16.17%
Max EPS beat(4)3.39%
EPS beat(8)4
Avg EPS beat(8)-0.52%
EPS beat(12)8
Avg EPS beat(12)6.66%
EPS beat(16)12
Avg EPS beat(16)9.91%
Revenue beat(2)0
Avg Revenue beat(2)-7.52%
Min Revenue beat(2)-8.97%
Max Revenue beat(2)-6.07%
Revenue beat(4)0
Avg Revenue beat(4)-6.88%
Min Revenue beat(4)-8.97%
Max Revenue beat(4)-4.96%
Revenue beat(8)0
Avg Revenue beat(8)-5.89%
Revenue beat(12)3
Avg Revenue beat(12)-2.51%
Revenue beat(16)7
Avg Revenue beat(16)1.7%
PT rev (1m)-1.12%
PT rev (3m)-6.91%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-15.08%
EPS NY rev (1m)0%
EPS NY rev (3m)-4.63%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-6.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.12 | ||
| Fwd PE | 12.26 | ||
| P/S | 0.32 | ||
| P/FCF | 120.98 | ||
| P/OCF | 15.36 | ||
| P/B | 1.21 | ||
| P/tB | 1.76 | ||
| EV/EBITDA | 12.4 |
EPS(TTM)3.96
EY7.08%
EPS(NY)4.56
Fwd EY8.15%
FCF(TTM)0.46
FCFY0.83%
OCF(TTM)3.64
OCFY6.51%
SpS174.54
BVpS46.04
TBVpS31.73
PEG (NY)N/A
PEG (5Y)1.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.56% | ||
| ROE | 6.18% | ||
| ROCE | 4.85% | ||
| ROIC | 3.57% | ||
| ROICexc | 3.67% | ||
| ROICexgc | 4.56% | ||
| OM | 1.92% | ||
| PM (TTM) | 1.63% | ||
| GM | 6.32% | ||
| FCFM | 0.26% |
ROA(3y)5.67%
ROA(5y)5.08%
ROE(3y)13.47%
ROE(5y)12.27%
ROIC(3y)7.66%
ROIC(5y)6.81%
ROICexc(3y)7.91%
ROICexc(5y)7.02%
ROICexgc(3y)9.73%
ROICexgc(5y)8.63%
ROCE(3y)9.78%
ROCE(5y)8.76%
ROICexcg growth 3Y-12.07%
ROICexcg growth 5Y2.66%
ROICexc growth 3Y-12.06%
ROICexc growth 5Y2.21%
OM growth 3Y-12%
OM growth 5Y-1.08%
PM growth 3Y-12.83%
PM growth 5Y-0.27%
GM growth 3Y-1.29%
GM growth 5Y1.04%
F-Score5
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 49.84 | ||
| Debt/EBITDA | 3.75 | ||
| Cap/Depr | 132.93% | ||
| Cap/Sales | 1.82% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 63.33% | ||
| Profit Quality | 16.25% | ||
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 2.93 |
F-Score5
WACC10.29%
ROIC/WACC0.35
Cap/Depr(3y)135.46%
Cap/Depr(5y)121.61%
Cap/Sales(3y)1.57%
Cap/Sales(5y)1.47%
Profit Quality(3y)67.69%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-37.54%
EPS 3Y-3.11%
EPS 5Y12.32%
EPS Q2Q%-52.05%
EPS Next Y-14.64%
EPS Next 2Y-1.73%
EPS Next 3Y0.72%
EPS Next 5Y-0.45%
Revenue 1Y (TTM)-8.56%
Revenue growth 3Y0.11%
Revenue growth 5Y5.76%
Sales Q2Q%-7.65%
Revenue Next Year-2.21%
Revenue Next 2Y0.23%
Revenue Next 3Y1.15%
Revenue Next 5Y-0.26%
EBIT growth 1Y-54.8%
EBIT growth 3Y-11.91%
EBIT growth 5Y4.61%
EBIT Next Year83.39%
EBIT Next 3Y27.02%
EBIT Next 5Y12.75%
FCF growth 1Y-86.5%
FCF growth 3Y-39.08%
FCF growth 5YN/A
OCF growth 1Y-43.14%
OCF growth 3Y-24.93%
OCF growth 5YN/A