Archer-Daniels Midland Company Stock Buy Recommendation Reiterated (ADM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Archer-Daniels Midland Company (NYSE: ADM) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 537.5% when compared to the same quarter one year prior, rising from $80.00 million to $510.00 million.
  • The revenue growth significantly trails the industry average of 43.3%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels.
  • Net operating cash flow has significantly increased by 109.11% to $1,995.00 million when compared to the same quarter last year. In addition, ARCHER-DANIELS-MIDLAND CO has also vastly surpassed the industry average cash flow growth rate of -46.87%.

Archer-Daniels-Midland Company manufactures and sells protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients. Archer-Daniels Midland has a market cap of $21.15 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 15.4, below the S&P 500 P/E ratio of 17.7. Shares are up 17.2% year to date as of the close of trading on Friday.

You can view the full Archer-Daniels Midland Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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