ARCHER-DANIELS-MIDLAND CO (ADM) Stock Fundamental Analysis
NYSE:ADM - New York Stock Exchange, Inc. - US0394831020 - Common Stock - Currency: USD
ADM gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 91 industry peers in the Food Products industry. Both the profitability and the financial health of ADM get a neutral evaluation. Nothing too spectacular is happening here. ADM has a valuation in line with the averages, but on the other hand it scores bad on growth. Finally ADM also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year ADM was profitable.
ADM had a positive operating cash flow in the past year.
Each year in the past 5 years ADM has been profitable.
ADM had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a Return On Assets value of 2.56%, ADM perfoms like the industry average, outperforming 48.35% of the companies in the same industry.
ADM's Return On Equity of 6.18% is in line compared to the rest of the industry. ADM outperforms 54.95% of its industry peers.
ADM has a Return On Invested Capital (3.57%) which is comparable to the rest of the industry.
ADM had an Average Return On Invested Capital over the past 3 years of 7.66%. This is significantly below the industry average of 28.10%.
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 in line with its industry peers.
ADM's Profit Margin has been stable in the last couple of years.
ADM has a Operating Margin (1.92%) which is comparable to the rest of the industry.
ADM's Operating Margin has been stable in the last couple of years.
ADM has a Gross Margin of 6.32%. This is amonst the worse of the industry: ADM underperforms 82.42% 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.
The number of shares outstanding for ADM has been reduced compared to 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
ADM has an Altman-Z score of 2.92. This is not the best score and indicates that ADM is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of ADM (2.92) is better than 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.
Looking at the Debt to FCF ratio, with a value of 49.84, ADM is in line with its industry, outperforming 51.65% of the companies in the same industry.
ADM has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
ADM has a Debt to Equity ratio (0.47) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 49.84 | ||
| Altman-Z | 2.92 |
ROIC/WACC0.43
WACC8.29%
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.
ADM has a Current ratio of 1.38. This is comparable to the rest of the industry: ADM outperforms 45.05% of its industry peers.
ADM has a Quick Ratio of 1.38. This is a bad value and indicates that ADM is not financially healthy enough and could expect problems in meeting its short term obligations.
ADM has a Quick ratio (0.81) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.38 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
ADM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.54%.
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.
Looking at the last year, ADM shows a decrease in Revenue. The Revenue has decreased by -8.56% in the last year.
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
Based on estimates for the next years, ADM will show a decrease in Earnings Per Share. The EPS will decrease by -0.45% on average per year.
The Revenue is expected to decrease by -0.26% on average over the next years.
EPS Next Y-14.49%
EPS Next 2Y-1.99%
EPS Next 3Y0.67%
EPS Next 5Y-0.45%
Revenue Next Year-2.03%
Revenue Next 2Y0.41%
Revenue Next 3Y1.54%
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
A Price/Earnings ratio of 13.57 indicates a correct valuation of ADM.
ADM's Price/Earnings ratio is a bit cheaper when compared to the industry. ADM is cheaper than 72.53% of the companies in the same industry.
ADM is valuated cheaply when we compare the Price/Earnings ratio to 27.19, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 11.85, the valuation of ADM can be described as very reasonable.
Based on the Price/Forward Earnings ratio, ADM is valued a bit cheaper than the industry average as 79.12% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 35.33. ADM is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.57 | ||
| Fwd PE | 11.85 |
4.2 Price Multiples
ADM's Enterprise Value to EBITDA is on the same level as the industry average.
ADM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 116.28 | ||
| EV/EBITDA | 12.12 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.1
EPS Next 2Y-1.99%
EPS Next 3Y0.67%
5. Dividend
5.1 Amount
ADM has a Yearly Dividend Yield of 3.72%.
ADM's Dividend Yield is rather good when compared to the industry average which is at 4.72. ADM pays more dividend than 80.22% of the companies in the same industry.
ADM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.72% |
5.2 History
The dividend of ADM is nicely growing with an annual growth rate of 7.05%!
ADM has paid a dividend for at least 10 years, which is 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
ADM pays out 71.38% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of ADM has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP71.38%
EPS Next 2Y-1.99%
EPS Next 3Y0.67%
53.73
-0.57 (-1.05%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners84.05%
Inst Owner Change0.01%
Ins Owners0.6%
Ins Owner Change7.16%
Market Cap25.81B
Analysts52.22
Price Target49.98 (-6.98%)
Short Float %2.21%
Short Ratio2.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.72% |
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)0%
PT rev (3m)-4.56%
EPS NQ rev (1m)-3.21%
EPS NQ rev (3m)-17.8%
EPS NY rev (1m)0.18%
EPS NY rev (3m)-4.45%
Revenue NQ rev (1m)-0.71%
Revenue NQ rev (3m)-6.98%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)-4.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.57 | ||
| Fwd PE | 11.85 | ||
| P/S | 0.31 | ||
| P/FCF | 116.28 | ||
| P/OCF | 14.77 | ||
| P/B | 1.17 | ||
| P/tB | 1.69 | ||
| EV/EBITDA | 12.12 |
EPS(TTM)3.96
EY7.37%
EPS(NY)4.53
Fwd EY8.44%
FCF(TTM)0.46
FCFY0.86%
OCF(TTM)3.64
OCFY6.77%
SpS174.54
BVpS46.04
TBVpS31.73
PEG (NY)N/A
PEG (5Y)1.1
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 | 2.92 |
F-Score5
WACC8.29%
ROIC/WACC0.43
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-14.49%
EPS Next 2Y-1.99%
EPS Next 3Y0.67%
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-2.03%
Revenue Next 2Y0.41%
Revenue Next 3Y1.54%
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