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 89 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 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
ADM has a Return On Assets (2.56%) which is in line with its industry peers.
ADM's Return On Equity of 6.18% is in line compared to the rest of the industry. ADM outperforms 57.30% of its industry peers.
ADM has a Return On Invested Capital of 3.57%. This is comparable to the rest of the industry: ADM outperforms 51.69% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ADM is in line with the industry average of 7.61%.
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
With a Profit Margin value of 1.63%, ADM perfoms like the industry average, outperforming 50.56% 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.
The Operating Margin of ADM (1.92%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of ADM has remained more or less at the same level.
ADM's Gross Margin of 6.32% is on the low side compared to the rest of the industry. ADM is outperformed by 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
ADM has a worse debt/assets ratio than last year.
2.2 Solvency
ADM has an Altman-Z score of 2.91. 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.
Looking at the Altman-Z score, with a value of 2.91, ADM is in the better half of the industry, outperforming 68.54% of the companies in the same industry.
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.
The Debt to Equity ratio of ADM (0.47) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 49.84 | ||
| Altman-Z | 2.91 |
ROIC/WACC0.35
WACC10.23%
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.
The Quick ratio of ADM (0.81) 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
The earnings per share for ADM have decreased strongly by -37.54% in the last year.
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%.
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-14.64%
EPS Next 2Y-1.73%
EPS Next 3Y0.72%
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.
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
The Price/Earnings ratio is 13.54, which indicates a correct valuation of ADM.
Compared to the rest of the industry, the Price/Earnings ratio of ADM indicates a somewhat cheap valuation: ADM is cheaper than 69.66% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.35, ADM is valued a bit cheaper.
The Price/Forward Earnings ratio is 11.76, 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 79.78% of the companies listed in the same industry.
ADM is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.54 | ||
| Fwd PE | 11.76 |
4.2 Price Multiples
ADM's Enterprise Value to EBITDA ratio is in line with the industry average.
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 | 116.02 | ||
| EV/EBITDA | 12 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)1.1
EPS Next 2Y-1.73%
EPS Next 3Y0.72%
5. Dividend
5.1 Amount
ADM has a Yearly Dividend Yield of 3.78%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 4.63, ADM pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.42, ADM pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.78% |
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 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-1.73%
EPS Next 3Y0.72%
53.61
-0.38 (-0.7%)
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 Cap25.76B
Analysts52.63
Price Target49.98 (-6.77%)
Short Float %2.35%
Short Ratio3.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.78% |
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 | 13.54 | ||
| Fwd PE | 11.76 | ||
| P/S | 0.31 | ||
| P/FCF | 116.02 | ||
| P/OCF | 14.74 | ||
| P/B | 1.16 | ||
| P/tB | 1.69 | ||
| EV/EBITDA | 12 |
EPS(TTM)3.96
EY7.39%
EPS(NY)4.56
Fwd EY8.5%
FCF(TTM)0.46
FCFY0.86%
OCF(TTM)3.64
OCFY6.79%
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 | 2.91 |
F-Score5
WACC10.23%
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-1.73%
EPS Next 3Y0.72%
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