Analyzing Archer-Daniels-Midland (ADM) & Its Rivals

Archer-Daniels-Midland (NYSE: ADM) is one of 50 publicly-traded companies in the “Food Processing” industry, but how does it contrast to its competitors? We will compare Archer-Daniels-Midland to similar companies based on the strength of its risk, analyst recommendations, dividends, earnings, valuation, institutional ownership and profitability.

Valuation and Earnings

This table compares Archer-Daniels-Midland and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Archer-Daniels-Midland $62.26 billion $2.70 billion 18.16
Archer-Daniels-Midland Competitors $8.38 billion $1.04 billion 22.52

Archer-Daniels-Midland has higher revenue and earnings than its competitors. Archer-Daniels-Midland is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Archer-Daniels-Midland and its competitors’ 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%
Archer-Daniels-Midland Competitors 4.09% 11.51% 4.84%

Dividends

Archer-Daniels-Midland pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Archer-Daniels-Midland pays out 53.8% of its earnings in the form of a dividend. As a group, “Food Processing” companies pay a dividend yield of 2.4% and pay out 58.4% of their earnings in the form of a dividend. Archer-Daniels-Midland has increased its dividend for 41 consecutive years. Archer-Daniels-Midland is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Volatility & Risk

Archer-Daniels-Midland has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Archer-Daniels-Midland’s competitors have a beta of 0.71, suggesting that their average stock price is 29% less volatile than the S&P 500.

Institutional and Insider Ownership

72.9% of Archer-Daniels-Midland shares are held by institutional investors. Comparatively, 63.5% of shares of all “Food Processing” companies are held by institutional investors. 2.7% of Archer-Daniels-Midland shares are held by insiders. Comparatively, 12.2% of shares of all “Food Processing” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Archer-Daniels-Midland and its competitors, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Archer-Daniels-Midland 1 5 2 0 2.13
Archer-Daniels-Midland Competitors 356 1651 1882 61 2.42

Archer-Daniels-Midland currently has a consensus price target of $42.67, indicating a potential downside of 1.26%. As a group, “Food Processing” companies have a potential downside of 1.51%. Given Archer-Daniels-Midland’s higher possible upside, equities analysts clearly believe Archer-Daniels-Midland is more favorable than its competitors.

Summary

Archer-Daniels-Midland competitors beat Archer-Daniels-Midland on 8 of the 15 factors compared.

Archer-Daniels-Midland Company Profile

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.

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