ARCHER-DANIELS-MIDLAND CO (ADM) Stock Fundamental Analysis
NYSE:ADM - New York Stock Exchange, Inc. - US0394831020 - Common Stock - Currency: USD
Taking everything into account, ADM scores 4 out of 10 in our fundamental rating. ADM was compared to 91 industry peers in the Food Products industry. ADM has only an average score on both its financial health and profitability. ADM has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
ADM had positive earnings in the past year.
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
ADM's Return On Assets of 2.56% is in line compared to the rest of the industry. ADM outperforms 49.45% of its industry peers.
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 28.20%.
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
Looking at the Profit Margin, with a value of 1.63%, ADM is in line with its industry, outperforming 51.65% 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 (1.92%) which is in line with 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 worse Gross Margin (6.32%) than 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.
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
An Altman-Z score of 2.92 indicates that ADM is not a great score, but indicates only limited risk for bankruptcy at the moment.
ADM has a better Altman-Z score (2.92) than 68.13% of its industry peers.
ADM has a debt to FCF ratio of 49.84. This is a negative value and a sign of low solvency as ADM would need 49.84 years to pay back of all of its debts.
The Debt to FCF ratio of ADM (49.84) is comparable to the rest of the industry.
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 | 2.92 |
ROIC/WACC0.44
WACC8.15%
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.
Looking at the Quick ratio, with a value of 0.81, ADM is in line with its industry, outperforming 48.35% of the companies in the same 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.
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 -8.56% in the past year.
Measured over the past years, ADM shows a small growth in Revenue. The Revenue has been growing by 5.76% on average per year.
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.
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-1.72%
Revenue Next 2Y0.57%
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.
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
Based on the Price/Earnings ratio of 13.73, the valuation of ADM can be described as correct.
Based on the Price/Earnings ratio, ADM is valued a bit cheaper than 72.53% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.24. ADM is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 11.99 indicates a reasonable valuation of ADM.
ADM's Price/Forward Earnings ratio is rather cheap when compared to the industry. ADM is cheaper than 81.32% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.42, ADM is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.73 | ||
| Fwd PE | 11.99 |
4.2 Price Multiples
ADM's Enterprise Value to EBITDA ratio is in line with the industry average.
ADM's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 117.65 | ||
| EV/EBITDA | 12.13 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.11
EPS Next 2Y-1.99%
EPS Next 3Y0.67%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.77%, ADM has a reasonable but not impressive dividend return.
ADM's Dividend Yield is a higher than the industry average which is at 4.74.
ADM's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.77% |
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 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-1.99%
EPS Next 3Y0.67%
54.36
+0.51 (+0.95%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryFood Products
Earnings (Last)
Earnings (Next)
Inst Owners84.05%
Inst Owner Change-0.72%
Ins Owners0.6%
Ins Owner Change7.05%
Market Cap26.12B
Analysts52.22
Price Target52.18 (-4.01%)
Short Float %2.77%
Short Ratio3.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.77% |
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)4.41%
PT rev (3m)3.24%
EPS NQ rev (1m)-2.12%
EPS NQ rev (3m)-17.3%
EPS NY rev (1m)0.18%
EPS NY rev (3m)-3.75%
Revenue NQ rev (1m)0.61%
Revenue NQ rev (3m)-6.03%
Revenue NY rev (1m)0.5%
Revenue NY rev (3m)-3.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.73 | ||
| Fwd PE | 11.99 | ||
| P/S | 0.31 | ||
| P/FCF | 117.65 | ||
| P/OCF | 14.94 | ||
| P/B | 1.18 | ||
| P/tB | 1.71 | ||
| EV/EBITDA | 12.13 |
EPS(TTM)3.96
EY7.28%
EPS(NY)4.53
Fwd EY8.34%
FCF(TTM)0.46
FCFY0.85%
OCF(TTM)3.64
OCFY6.69%
SpS174.54
BVpS46.04
TBVpS31.73
PEG (NY)N/A
PEG (5Y)1.11
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
WACC8.15%
ROIC/WACC0.44
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-1.72%
Revenue Next 2Y0.57%
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