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 89 industry peers in the Food Products industry. ADM has an average financial health and profitability rating. 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.
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.
ADM has a Return On Equity (6.18%) which is in line with its industry peers.
With a Return On Invested Capital value of 3.57%, ADM perfoms like the industry average, outperforming 51.69% of the companies in the same industry.
ADM had an Average Return On Invested Capital over the past 3 years of 7.66%. This is in line with the industry average of 7.60%.
The last Return On Invested Capital (3.57%) for ADM is well below the 3 year average (7.66%), which needs to be investigated, but indicates that ADM had better years and this may not be a problem.
| 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.
In the last couple of years the Profit Margin of ADM has remained more or less at the same level.
With a Operating Margin value of 1.92%, ADM perfoms like the industry average, outperforming 44.94% of the companies in the same industry.
ADM's Operating Margin has been stable in the last couple of years.
ADM has a worse Gross Margin (6.32%) than 82.02% 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 | 1.92% | ||
| 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
ADM has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
ADM has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, ADM has less shares outstanding
Compared to 1 year ago, ADM has a worse debt to assets ratio.
2.2 Solvency
ADM has an Altman-Z score of 2.90. 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.
ADM's Altman-Z score of 2.90 is fine compared to the rest of the industry. ADM outperforms 69.66% 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's Debt to FCF ratio of 49.84 is in line compared to the rest of the industry. ADM outperforms 51.69% of its industry peers.
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 comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 49.84 | ||
| Altman-Z | 2.9 |
ROIC/WACC0.35
WACC10.3%
2.3 Liquidity
A Current Ratio of 1.38 indicates that ADM should not have too much problems paying its short term obligations.
ADM has a Current ratio of 1.38. This is comparable to the rest of the industry: ADM outperforms 44.94% of its industry peers.
A Quick Ratio of 0.81 indicates that ADM may have some problems paying its short term obligations.
ADM has a Quick ratio (0.81) which 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
ADM shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.54%.
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%.
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
ADM is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.45% yearly.
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-1.76%
EPS Next 3Y0.58%
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
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
Based on the Price/Earnings ratio of 13.13, the valuation of ADM can be described as correct.
Compared to the rest of the industry, the Price/Earnings ratio of ADM indicates a somewhat cheap valuation: ADM is cheaper than 70.79% of the companies listed in the same industry.
ADM is valuated cheaply when we compare the Price/Earnings ratio to 26.31, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 11.42, which indicates a very decent valuation of ADM.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ADM indicates a somewhat cheap valuation: ADM is cheaper than 78.65% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of ADM to the average of the S&P500 Index (22.13), we can say ADM is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.13 | ||
| Fwd PE | 11.42 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as ADM.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of ADM is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 112.54 | ||
| EV/EBITDA | 11.72 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.07
EPS Next 2Y-1.76%
EPS Next 3Y0.58%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.11%, ADM is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.49, ADM pays a better dividend. On top of this ADM pays more dividend than 82.02% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, ADM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.11% |
5.2 History
The dividend of ADM is nicely growing with an annual growth rate of 7.05%!
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
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-1.76%
EPS Next 3Y0.58%
52
+2.34 (+4.71%)
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 Cap24.98B
Analysts52.63
Price Target49.98 (-3.88%)
Short Float %2.71%
Short Ratio2.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.11% |
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)-15.32%
EPS NY rev (1m)0%
EPS NY rev (3m)-5.63%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.22%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.13 | ||
| Fwd PE | 11.42 | ||
| P/S | 0.3 | ||
| P/FCF | 112.54 | ||
| P/OCF | 14.29 | ||
| P/B | 1.13 | ||
| P/tB | 1.64 | ||
| EV/EBITDA | 11.72 |
EPS(TTM)3.96
EY7.62%
EPS(NY)4.56
Fwd EY8.76%
FCF(TTM)0.46
FCFY0.89%
OCF(TTM)3.64
OCFY7%
SpS174.54
BVpS46.04
TBVpS31.73
PEG (NY)N/A
PEG (5Y)1.07
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 | 2.9 |
F-Score5
WACC10.3%
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-1.76%
EPS Next 3Y0.58%
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