Archer-Daniels Midland Co

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ADM : NYSE : Consumer Goods
$44.0 | %
Today's Range: 43.92 - 44.745
Avg. Daily Volume: 2983100.0
12/02/16 - 4:00 PM ET

Financial Analysis


ARCHER-DANIELS-MIDLAND CO's gross profit margin for the third quarter of its fiscal year 2016 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. ARCHER-DANIELS-MIDLAND CO has weak liquidity. Currently, the Quick Ratio is 0.88 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.81% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)15832.016565.0
EBITDA ($mil)770.0787.0
EBIT ($mil)544.0570.0
Net Income ($mil)341.0252.0


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)6354.06303.0
Total Assets ($mil)39853.040877.0
Total Debt ($mil)7073.06782.0
Equity ($mil)17538.017863.0


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin8.417.88
EBITDA Margin4.864.75
Operating Margin3.443.44
Sales Turnover1.561.77
Return on Assets3.944.48
Return on Equity8.9610.25
Debt Q3 FY16 Q3 FY15
Current Ratio1.611.63
Debt/Capital0.290.28
Interest Expense78.069.0
Interest Coverage6.978.26


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)578.0601.0
Div / share0.30.28
EPS0.580.41
Book value / share30.3429.72
Institutional Own % n/a n/a
Avg Daily Volume2829402.03321779.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 34.62 for the Food Products industry and a discount compared to the S&P 500 average of 25.16. To use another comparison, its price-to-book ratio of 1.42 indicates a discount versus the S&P 500 average of 2.79 and a significant discount versus the industry average of 4.71. 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 16.29 Peers 34.62   ADM 9.87 Peers 17.64

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 significant 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 14.58 Peers 21.93   ADM NM Peers 6.20

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 1.42 Peers 4.71   ADM -8.34 Peers 198.67

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 0.40 Peers 2.19   ADM -13.67 Peers 25.10

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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