ARCHER-DANIELS-MIDLAND CO (ADM) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:ADM - US0394831020 - Common Stock
67.14 USD
-0.37 (-0.55%)
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.
- In the past year ADM had a positive cash flow from operations.
- 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
- Looking at the Return On Assets, with a value of 2.29%, ADM is in line with its industry, outperforming 50.57% of the companies in the same industry.
- ADM has a Return On Equity (5.29%) which is in line with its industry peers.
- Looking at the Return On Invested Capital, with a value of 3.69%, ADM is in line with its industry, outperforming 55.17% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years 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
- With a Profit Margin value of 1.43%, ADM perfoms like the industry average, outperforming 45.98% of the companies in the same industry.
- In the last couple of years the Profit Margin of ADM has remained more or less at the same level.
- ADM has a Operating Margin of 1.83%. This is comparable 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.
- In the last couple of years the Gross Margin of ADM has remained more or less at the same level.
| 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
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ADM is destroying value.
- Compared to 1 year ago, ADM has less shares outstanding
- Compared to 5 years ago, ADM has less shares outstanding
- ADM has a worse debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 3.11 indicates that ADM is not in any danger for bankruptcy at the moment.
- ADM has a better Altman-Z score (3.11) than 66.67% of its industry peers.
- ADM has a debt to FCF ratio of 1.67. This is a very positive value and a sign of high solvency as it would only need 1.67 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 1.67, ADM belongs to the top 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.
- With a Debt to Equity ratio value of 0.30, ADM perfoms like the industry average, outperforming 59.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 1.67 | ||
| Altman-Z | 3.11 |
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
- ADM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -25.30%.
- 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.
- The Revenue has decreased by -4.37% in the past year.
- The Revenue has been growing slightly by 5.76% on average over the past years.
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
- Based on estimates for the next years, ADM will show a small growth in Earnings Per Share. The EPS will grow by 0.26% on average per year.
- 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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 18.20 indicates a rather expensive valuation of ADM.
- Compared to the rest of the industry, the Price/Earnings ratio of ADM is on the same level as its industry peers.
- The average S&P500 Price/Earnings ratio is at 27.21. ADM is valued slightly cheaper when compared to this.
- ADM is valuated correctly with a Price/Forward Earnings ratio of 15.69.
- ADM's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. ADM is cheaper than 70.11% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, ADM is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.2 | ||
| Fwd PE | 15.69 |
4.2 Price Multiples
- ADM's Enterprise Value to EBITDA is on the same level as the industry average.
- 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 | 6.86 | ||
| EV/EBITDA | 14.48 |
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.
- ADM's Dividend Yield is a higher than the industry average which is at 2.29.
- Compared to an average S&P500 Dividend Yield of 1.81, 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%.