Critical Analysis: Archer-Daniels-Midland (ADM) versus Amira Nature Foods (ANFI)

Archer-Daniels-Midland (NYSE: ADM) and Amira Nature Foods (NYSE:ANFI) are both consumer staples companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitabiliy, analyst recommendations, valuation, earnings and institutional ownership.

Dividends

Archer-Daniels-Midland pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Amira Nature Foods does not pay a dividend. Archer-Daniels-Midland pays out 53.8% of its earnings in the form of a dividend. Amira Nature Foods has increased its dividend for 41 consecutive years.

Profitability

This table compares Archer-Daniels-Midland and Amira Nature Foods’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Archer-Daniels-Midland 2.22% 8.40% 3.71%
Amira Nature Foods 6.30% 23.16% 7.89%

Earnings and Valuation

This table compares Archer-Daniels-Midland and Amira Nature Foods’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Archer-Daniels-Midland $62.26 billion 0.38 $2.70 billion $2.38 17.70
Amira Nature Foods $551.88 million 0.36 $70.71 million N/A N/A

Archer-Daniels-Midland has higher revenue and earnings than Amira Nature Foods.

Analyst Recommendations

This is a breakdown of current recommendations for Archer-Daniels-Midland and Amira Nature Foods, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Archer-Daniels-Midland 1 5 2 0 2.13
Amira Nature Foods 0 1 1 0 2.50

Archer-Daniels-Midland presently has a consensus price target of $43.83, indicating a potential upside of 4.07%. Amira Nature Foods has a consensus price target of $13.00, indicating a potential upside of 143.90%. Given Amira Nature Foods’ stronger consensus rating and higher possible upside, analysts clearly believe Amira Nature Foods is more favorable than Archer-Daniels-Midland.

Volatility and Risk

Archer-Daniels-Midland has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Amira Nature Foods has a beta of -0.19, indicating that its stock price is 119% less volatile than the S&P 500.

Insider & Institutional Ownership

73.2% of Archer-Daniels-Midland shares are owned by institutional investors. Comparatively, 13.1% of Amira Nature Foods shares are owned by institutional investors. 2.7% of Archer-Daniels-Midland shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Archer-Daniels-Midland beats Amira Nature Foods on 9 of the 16 factors compared between the two stocks.

About Archer-Daniels-Midland

Archer-Daniels-Midland Company is a processor of oilseeds, corn, wheat, cocoa and other agricultural commodities. The Company manufactures protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients. Its segments include Agricultural Services, which utilizes its United States grain elevator, global transportation network and port operations to buy, store, clean and transport agricultural commodities, such as oilseeds, wheat, milo, oats, rice and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry; Corn Processing, which is engaged in corn wet milling and dry milling activities; Oilseeds Processing, which includes global activities related to the origination, merchandising, crushing and further processing of oilseeds; Wild Flavors and Specialty Ingredients products, which include flavors, sweeteners and health ingredients; Other, and Corporate.

About Amira Nature Foods

Amira Nature Foods Ltd is primarily engaged in the business of processing and selling packaged Indian specialty rice, primarily basmati rice and other food products. The Company sells Basmati rice and other specialty rice, under its Amira brand, as well as under other third-party brands. It also sells non-basmati rice. It has developed a line of Amira branded products to complement its packaged rice offerings, including edible oil, snacks, ready-to-heat meals and a line of organic product offerings. It is engaged in the institutional sale of bulk commodities to international and regional trading firms, which includes wheat, barley, legume, maize, sugar, soybean meal, onion, potato, millet and others. Its Amira branded product line includes Amira Pure Basmati Rice, Amira Indian Basmati Rice, Smoked Basmati Rice, Amira Khichdi Rice, Amira Navratan Mix and others. The Company’s third-party branded rice products include Euricom Brown Basmati Rice, Bonne Chance Long Grain Rice and others.

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