Archer Daniels Midland Company

Archer Daniels Midland Company (ADM) has fared better than the market recently on strong fundamentals, which include an industry-leading return on equity (ROE) and profit margin. Shares soared 20% over the past 6 months, while the Dow ($DJI), S&P 500 (SPX) and Nasdaq (COMP) show negative returns over the same time period.

Company Description

Archer-Daniels-Midland, one of the largest agricultural processors worldwide, makes food ingredients, animal feed ingredients, renewable fuels and naturally derived alternatives to industrial chemicals. The company is headquartered in Decatur, Illinois.

Archer-Daniels-Midland explains that farmers are essential to the overall economy, which is why it works to be essential to the farming community, creating thousands of products from crops and providing hundreds of markets for farmers’ crops.

Favorable Industry Comparisons

Archer-Daniels-Midland’s return on equity (ROE) of 19% fares well against a negative industry average figure.

The company’s net profit margin of 3% is also stacked up against a negative industry average.

ADM’s earnings per share are expected to grow by 18% over the next 3 – 5 years, which is in line with the industry average.

The company has fared better than the market recently on the strong fundamentals, seeing about a 20% rise in share price over the past 6 months. The major averages are down by more than 30% over the same time frame.

ADM is Executing its Growth Strategy

Discussing its growth plan, the company recently said while it is not immune to the effects of the current economic downturn, its strong balance sheet, global asset base, industry acumen, and expertise in risk- and cost-management are enabling ADM to execute its growth strategy.

"Our disciplined approach to controlling our expenses, optimizing our balance sheet, and managing through uncertainties in the marketplace has served us extremely well through many business cycles," said Chairman, CEO and President Patricia Woertz at the Consumer Analyst Group of New York's annual conference in Boca Raton, Florida.

Woertz also outlined ADM's three-part growth strategy, which focuses on expanding volumes and the scope of its value chain in three ways: diversifying feedstocks, expanding the ADM's geographic footprint and expanding its product lines to respond to demand from food, feed and bioenergy customers.

ADM’s 309th Dividend

Archer Daniels Midland Company declared a dividend of 14 cents per share, which represents a 1-cent increase. The dividend was paid out on March 12, 2009. The company offers an industry-leading yield of 2%.

It is ADM's 309th consecutive quarterly dividend, which translates into 77 years of uninterrupted dividends.

Estimates are on the Rise

ADM has seen fiscal year earnings estimates climb from $3.53 per share to $3.47 over the past 2 months.

Read the full analyst report on ADM