Archer-Daniels Midland Co

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ADM : NYSE : Consumer Goods
$42.47 | %
Today's Range: 42.47 - 42.93
Avg. Daily Volume: 2,765,700
09/23/16 - 4:01 PM ET

Financial Analysis


ARCHER-DANIELS-MIDLAND CO's gross profit margin for the second quarter of its fiscal year 2016 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. ARCHER-DANIELS-MIDLAND CO has weak liquidity. Currently, the Quick Ratio is 0.78 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 4.79% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)15629.017186.0
EBITDA ($mil)458.0664.0
EBIT ($mil)237.0439.0
Net Income ($mil)284.0386.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)6270.05908.0
Total Assets ($mil)40098.040568.0
Total Debt ($mil)7386.06923.0
Equity ($mil)17655.018544.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin6.266.92
EBITDA Margin2.933.86
Operating Margin1.522.55
Sales Turnover1.571.82
Return on Assets3.75.73
Return on Equity8.412.54
Debt Q2 FY16 Q2 FY15
Current Ratio1.511.76
Debt/Capital0.30.27
Interest Expense65.085.0
Interest Coverage3.655.16


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)583.0614.0
Div / share0.30.28
EPS0.480.62
Book value / share30.2830.2
Institutional Own % n/a n/a
Avg Daily Volume2851327.03644620.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 25.19 for the Food Products industry and a discount compared to the S&P 500 average of 24.84. To use another comparison, its price-to-book ratio of 1.40 indicates a discount versus the S&P 500 average of 2.78 and a significant discount versus the industry average of 6.19. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, ARCHER-DANIELS-MIDLAND CO proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
ADM 17.12 Peers 25.19   ADM 14.60 Peers 18.14

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

ADM is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

ADM is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
ADM 14.33 Peers 21.26   ADM NM Peers 1.17

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

ADM is trading at a discount to its peers.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

ADM's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
ADM 1.40 Peers 6.19   ADM -31.58 Peers 79.03

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

ADM is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, ADM is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
ADM 0.39 Peers 1.91   ADM -14.50 Peers 0.32

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

ADM is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

ADM significantly trails its peers on the basis of sales growth

 

 

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