NYSE:ADM

Stock Analysis Report

Executive Summary

Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients in the United States and internationally.

Snowflake

Fundamentals

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Archer-Daniels-Midland's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.7%

ADM

-0.4%

US Food

1.0%

US Market


1 Year Return

-17.5%

ADM

3.4%

US Food

6.7%

US Market

Return vs Industry: ADM underperformed the US Food industry which returned 3.4% over the past year.

Return vs Market: ADM underperformed the US Market which returned 6.7% over the past year.


Share holder returns

ADMIndustryMarket
7 Day1.7%-0.4%1.0%
30 Day-2.8%-1.6%-1.8%
90 Day-0.9%0.8%-1.8%
1 Year-14.7%-17.5%6.5%3.4%9.1%6.7%
3 Year6.2%-3.3%-1.4%-10.1%46.1%36.6%
5 Year3.2%-10.9%47.5%29.9%66.9%48.6%

Price Volatility Vs. Market

How volatile is Archer-Daniels-Midland's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Archer-Daniels-Midland undervalued based on future cash flows and its price relative to the stock market?

39%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: ADM ($40.46) is trading below our estimate of fair value ($66.39)

Significantly Undervalued: ADM is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: ADM is good value based on its PE Ratio (17.3x) compared to the Food industry average (25.4x).

PE vs Market: ADM is good value based on its PE Ratio (17.3x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: ADM is good value based on its PEG Ratio (0.8x)


Price Based on Value of Assets

PB vs Industry: ADM is good value based on its PB Ratio (1.2x) compared to the US Food industry average (2.1x).


Next Steps

Future Growth

How is Archer-Daniels-Midland expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

21.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: ADM's forecast earnings growth (21.5% per year) is above the savings rate (2.7%).

Earnings vs Market: ADM's earnings (21.5% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ADM's revenue (2.4% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: ADM's revenue (2.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: ADM's Return on Equity is forecast to be low in 3 years time (9.4%).


Next Steps

Past Performance

How has Archer-Daniels-Midland performed over the past 5 years?

-4.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ADM's earnings have declined by -4.9% per year over the past 5 years.

Accelerating Growth: ADM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ADM had negative earnings growth (-32%) over the past year, making it difficult to compare to the Food industry average (-22.7%).


Return on Equity

High ROE: ADM's Return on Equity (7%) is considered low.


Return on Assets

ROA vs Industry: ADM's Return on Assets is below or equal to the Food industry average last year.


Return on Capital Employed

ROCE Improving: ADM's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Archer-Daniels-Midland's financial position?


Financial Position Analysis

Short Term Liabilities: ADM's short term assets ($19.5B) exceeds its short term liabilities ($12.6B)

Long Term Liabilities: ADM's short term assets (19.5B) exceeds its long term liabilities (11.0B)


Debt to Equity History and Analysis

Debt Level: ADM's debt to equity ratio (49.7%) is considered high

Reducing Debt: ADM's debt to equity ratio has increased from 27.8% to 49.7% over the past 5 years.

Debt Coverage: ADM's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: ADM's interest payments on its debt are well covered by EBIT (7.4x coverage).


Balance Sheet

Inventory Level: ADM has a high level of physical assets or inventory.

Debt Coverage by Assets: ADM's debt is covered by short term assets (assets are 2.066820x debt).


Next Steps

Dividend

What is Archer-Daniels-Midland's current dividend yield, its reliability and sustainability?

3.53%

Expected Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%1.5%markettop25%3.8%industryaverage2.1%forecastin3Years3.5%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: ADM's dividend (3.46%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: ADM's dividend (3.46%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: ADM's dividends per share have been stable in the past 10 years.

Growing Dividend: ADM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.6%), ADM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ADM's dividends in 3 years are forecast to be well covered by earnings (39.4% payout ratio).


Next Steps

Management

What is the CEO of Archer-Daniels-Midland's salary, the management and board of directors tenure and is there insider trading?

4.6yrs

Average management tenure


CEO

Juan Luciano (58yo)

4.8yrs

Tenure

US$19,637,534

Compensation

Mr. Juan Ricardo Luciano has been the Chief Executive Officer of Archer Daniels Midland Company (Archer-Daniels-Midland Company) since January 1, 2015 and has been its President since February 2014. Mr. Lu ...


CEO Compensation Analysis

Compensation vs. Market: Juan's total compensation ($USD19.64M) is about average for companies of similar size in the US market ($USD11.20M).

Compensation vs Earnings: Juan's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

4.6yrs

Average Tenure

54.5yo

Average Age

Experienced Management: ADM's management team is considered experienced (4.6 years average tenure).


Board Age and Tenure

7.7yrs

Average Tenure

63.5yo

Average Age

Experienced Board: ADM's board of directors are considered experienced (7.7 years average tenure).


Insider Trading

Insider Buying: ADM insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$199,99006 Aug 19
Juan Luciano
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,457
Max PriceUS$36.65
BuyUS$124,89906 Aug 19
Ray Young
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares3,400
Max PriceUS$36.74
BuyUS$1,000,69129 Apr 19
Juan Luciano
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares23,657
Max PriceUS$42.30
BuyUS$256,54229 Apr 19
Ray Young
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares6,000
Max PriceUS$42.76
BuyUS$2,508,00007 Feb 19
Donald Felsinger
EntityIndividual
Role
Lead Director
Lead Independent Director
Shares60,000
Max PriceUS$41.80
BuyUS$99,42907 Nov 18
Ray Young
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares2,100
Max PriceUS$47.35

Ownership Breakdown


Management Team

  • Joe Taets (53yo)

    Senior VP & President of Global Business Readiness

    • Tenure: 12.1yrs
    • Compensation: US$6.59m
  • John Stott (51yo)

    Group VP of Finance

    • Tenure: 3.7yrs
  • Ray Young (57yo)

    Executive VP & CFO

    • Tenure: 8.8yrs
    • Compensation: US$7.50m
  • Chris Cuddy (45yo)

    Senior VP & President of Carbohydrate Solutions

    • Tenure: 4.4yrs
    • Compensation: US$4.81m
  • Juan Luciano (58yo)

    Chairman

    • Tenure: 4.8yrs
    • Compensation: US$19.64m
  • Todd Werpy (56yo)

    Senior VP & CTO

    • Tenure: 4.6yrs
  • Kristy Folkwein (56yo)

    Senior VP & Chief Information Officer

    • Tenure: 1.4yrs
  • Greg Morris (47yo)

    Senior VP & President of Agricultural Services and Oilseeds

    • Tenure: 4.9yrs
    • Compensation: US$5.03m
  • Mark Schweitzer

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Veronica Braker

    Senior Vice President of Global Operations

    • Tenure: 0.8yrs

Board Members

  • Pat Moore (64yo)

    Independent Director

    • Tenure: 15.9yrs
    • Compensation: US$315.00k
  • Don Felsinger (71yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$335.00k
  • Terry Crews (64yo)

    Independent Director

    • Tenure: 8.4yrs
    • Compensation: US$325.00k
  • Alan Boeckmann (70yo)

    Independent Director

    • Tenure: 7.7yrs
    • Compensation: US$300.00k
  • Kelvin Westbrook (63yo)

    Independent Director

    • Tenure: 15.9yrs
    • Compensation: US$324.00k
  • Pierre Dufour (64yo)

    Independent Director

    • Tenure: 9.4yrs
    • Compensation: US$300.00k
  • Frank Sanchez (59yo)

    Independent Director

    • Tenure: 5.4yrs
    • Compensation: US$300.00k
  • Suzan Harrison (61yo)

    Independent Director

    • Tenure: 2.4yrs
    • Compensation: US$300.00k
  • Juan Luciano (58yo)

    Chairman

    • Tenure: 4.8yrs
    • Compensation: US$19.64m
  • Debra Sandler (59yo)

    Independent Director

    • Tenure: 3.4yrs
    • Compensation: US$300.00k

Company Information

Archer-Daniels-Midland Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Archer-Daniels-Midland Company
  • Ticker: ADM
  • Exchange: NYSE
  • Founded: 1902
  • Industry: Agricultural Products
  • Sector: Food, Beverage & Tobacco
  • Market Cap: US$22.535b
  • Shares outstanding: 556.97m
  • Website: https://www.adm.com

Number of Employees


Location

  • Archer-Daniels-Midland Company
  • 77 West Wacker Drive
  • Suite 4600
  • Chicago
  • Illinois
  • 60601
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ADMNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 1964
ADMSWX (SIX Swiss Exchange)YesCommon StockCHCHFMar 1964
ADMXTRA (XETRA Trading Platform)YesCommon StockDEEURMar 1964
ADM *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMar 1964
0JQQLSE (London Stock Exchange)YesCommon StockGBUSDMar 1964
ADMDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1964
ARDAWBAG (Wiener Boerse AG)YesCommon StockATEURMar 1964

Biography

Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients in the United States and internationally. The company operates t ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:04
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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