Shares of Archer-Daniels-Midland Company (ADM Quick QuoteADM - Free Report) have climbed 24.7% on a year-to-date basis, outperforming the Zacks categorized Consumer Staples sector’s growth of 0.9%, mainly driven by the strategic initiatives undertaken to manage its business portfolio. These initiatives are expected to help the company realize value and invest the same in the best possible resources to enhance returns. Moreover, the stock is hovering close to its 52-week high of $47.88 and has a long-term earnings growth rate of 8.5%.

Archer Daniels also remains focused on strengthening its business through increased cost savings, a key component of its long-term strategy. The company has already achieved $250 million of run-rate savings in the first nine months of 2016 and is on track to achieve a target of $275 million, by the end of 2016. Also, it remains focused on cost synergy activities by addressing redundancies and removing overlapping corporate SG&A.

Further, this leading food processing company is strategically managing its business portfolio, as evident from its recent acquisitions and joint ventures and the sale of underperforming businesses as well. Some of the recent activities include increasing production capacity, along with expansion of the finishing capabilities of its corn wet mills at Adana, Turkey, and Razgrad, Bulgaria, selling its stake in the Australian grain handler, GrainCorp Limited, along with the acquisition of Lake Bluff, IL-based Caterina Foods, manufacturing gluten-free and high-protein pastas.

Alongside, Archer Daniels has been continuing its investment activities for business growth. With regard to this, it shifted from domestic projects – where returns are difficult to model – to international projects that can be tracked more easily and will be accretive at a faster pace.

All these factors aided the company in reporting a better-than-expected bottom line in third-quarter 2016, after five straight quarters of earnings decline. Citing the improved market conditions and greater U.S. harvest, along with solid execution capabilities, the company remains confident of delivering solid results through the rest of 2016 and 2017.

However, its top line was affected by soft sales at its Corn Processing and Oilseeds Processing segments. Also, the company’s global market presence exposes it to the risk of adverse currency movements. Intense competition and seasonality factors are other deterrents for the company.

Moreover, estimates have been going down lately ahead of the company's fourth quarter earnings release. The Zacks Consensus Estimate for fourth-quarter 2016 has declined 2.4% to 83 cents in the past 30 days.

Zacks Rank & Key Picks

Archer Daniels currently has a Zacks Rank #3 (Hold). Some better-ranked stocks include Dean Foods Company , US Foods Holding Corp. (USFD Quick QuoteUSFD - Free Report) and Lancaster Colony Corporation (LANC Quick QuoteLANC - Free Report) .

Dean Foods, with a long-term earnings growth of 12%, has gained 25.3% year to date. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

US Foods, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 17.1%. The stock has rose 13.6% in the past three months.

Lancaster Colony, a Zacks Rank #2 stock, has gained roughly 24.1% in the past one year.

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