ARCHER-DANIELS-MIDLAND CO (ADM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ADM - US0394831020 - Common Stock
67.4 USD
-0.83 (-1.22%)
67.35 USD
-0.05 (-0.07%)
ADM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 87 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.
1. Profitability
1.1 Basic Checks
- In the past year ADM was profitable.
- ADM had a positive operating cash flow in the past year.
- In the past 5 years ADM has always been profitable.
- Of the past 5 years ADM 4 years had a positive operating cash flow.
1.2 Ratios
- With a Return On Assets value of 2.29%, ADM perfoms like the industry average, outperforming 50.57% of the companies in the same industry.
- ADM has a Return On Equity (5.29%) which is comparable to the rest of the industry.
- ADM's Return On Invested Capital of 3.69% is in line compared to the rest of the industry. ADM outperforms 55.17% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ADM is significantly below the industry average of 27.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.29% | ||
| ROE | 5.29% | ||
| ROIC | 3.69% |
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 (1.43%) which is in line with its industry peers.
- In the last couple of years the Profit Margin of ADM has remained more or less at the same level.
- ADM's Operating Margin of 1.83% is in line compared to the rest of the industry. ADM outperforms 44.83% of its industry peers.
- In the last couple of years the Operating Margin of ADM has remained more or less at the same level.
- ADM has a Gross Margin of 6.22%. This is in the lower half of the industry: ADM underperforms 78.16% of its industry peers.
- ADM's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 1.83% | ||
| PM (TTM) | 1.43% | ||
| GM | 6.22% |
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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so ADM is destroying value.
- The number of shares outstanding for ADM has been reduced compared to 1 year ago.
- The number of shares outstanding for ADM has been reduced compared to 5 years ago.
- ADM has a worse debt/assets ratio than last year.
2.2 Solvency
- ADM has an Altman-Z score of 3.12. This indicates that ADM is financially healthy and has little risk of bankruptcy at the moment.
- ADM has a better Altman-Z score (3.12) than 66.67% of its industry peers.
- The Debt to FCF ratio of ADM is 1.67, which is an excellent value as it means it would take ADM, only 1.67 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 1.67, ADM belongs to the best of the industry, outperforming 85.06% of the companies in the same industry.
- ADM has a Debt/Equity ratio of 0.30. This is a healthy value indicating a solid balance between debt and equity.
- Looking at the Debt to Equity ratio, with a value of 0.30, ADM is in line with its industry, outperforming 59.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 1.67 | ||
| Altman-Z | 3.12 |
ROIC/WACC0.45
WACC8.27%
2.3 Liquidity
- ADM has a Current Ratio of 1.37. This is a normal value and indicates that ADM is financially healthy and should not expect problems in meeting its short term obligations.
- ADM has a Current ratio of 1.37. This is comparable to the rest of the industry: ADM outperforms 41.38% of its industry peers.
- ADM has a Quick Ratio of 1.37. This is a bad value and indicates that ADM is not financially healthy enough and could expect problems in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 0.92, ADM is in line with its industry, outperforming 55.17% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.37 | ||
| Quick Ratio | 0.92 |
3. Growth
3.1 Past
- The earnings per share for ADM have decreased strongly by -25.30% in the last year.
- Measured over the past years, ADM shows a quite strong growth in Earnings Per Share. The EPS has been growing by 12.32% on average per year.
- ADM shows a decrease in Revenue. In the last year, the revenue decreased by -4.37%.
- ADM shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.76% yearly.
EPS 1Y (TTM)-25.3%
EPS 3Y-3.11%
EPS 5Y12.32%
EPS Q2Q%-15.6%
Revenue 1Y (TTM)-4.37%
Revenue growth 3Y0.11%
Revenue growth 5Y5.76%
Sales Q2Q%2.18%
3.2 Future
- ADM is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 0.26% yearly.
- ADM is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.26% yearly.
EPS Next Y-27.52%
EPS Next 2Y-4.79%
EPS Next 3Y0.2%
EPS Next 5Y0.26%
Revenue Next Year-3.83%
Revenue Next 2Y0.21%
Revenue Next 3Y1.64%
Revenue Next 5Y-0.26%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- 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
- ADM is valuated rather expensively with a Price/Earnings ratio of 18.27.
- ADM's Price/Earnings is on the same level as the industry average.
- ADM's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.60.
- ADM is valuated correctly with a Price/Forward Earnings ratio of 15.75.
- Based on the Price/Forward Earnings ratio, ADM is valued a bit cheaper than 71.26% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.83. ADM is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.27 | ||
| Fwd PE | 15.75 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ADM is on the same level as its industry peers.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADM indicates a rather cheap valuation: ADM is cheaper than 91.95% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.89 | ||
| EV/EBITDA | 14.61 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.48
EPS Next 2Y-4.79%
EPS Next 3Y0.2%
5. Dividend
5.1 Amount
- ADM has a Yearly Dividend Yield of 3.04%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 2.29, ADM pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, ADM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.04% |
5.2 History
- On average, the dividend of ADM grows each year by 7.05%, which is quite nice.
- ADM has paid a dividend for at least 10 years, which is a reliable track record.
- ADM has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)7.05%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
- ADM pays out 82.76% of its income as dividend. This is not a sustainable payout ratio.
- The dividend of ADM is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP82.76%
EPS Next 2Y-4.79%
EPS Next 3Y0.2%
ARCHER-DANIELS-MIDLAND CO / ADM FAQ
What is the fundamental rating for ADM stock?
ChartMill assigns a fundamental rating of 4 / 10 to ADM.
What is the valuation status for ADM stock?
ChartMill assigns a valuation rating of 4 / 10 to ARCHER-DANIELS-MIDLAND CO (ADM). This can be considered as Fairly Valued.
Can you provide the profitability details for ARCHER-DANIELS-MIDLAND CO?
ARCHER-DANIELS-MIDLAND CO (ADM) has a profitability rating of 4 / 10.
What is the earnings growth outlook for ARCHER-DANIELS-MIDLAND CO?
The Earnings per Share (EPS) of ARCHER-DANIELS-MIDLAND CO (ADM) is expected to decline by -27.52% in the next year.
Can you provide the dividend sustainability for ADM stock?
The dividend rating of ARCHER-DANIELS-MIDLAND CO (ADM) is 6 / 10 and the dividend payout ratio is 82.76%.