Archer-Daniels-Midland Co (NYSE: ADM)

Sector: Consumer Defensive Industry: Farm Products CIK: 0000007084
Market Cap 33.15 Bn
P/B 1.46
P/E 30.75
P/S 0.41
ROIC (Qtr) 2.83
Div Yield % 2.98
Rev 1y % (Qtr) -13.68
Total Debt (Qtr) 9.76 Bn
Debt/Equity (Qtr) 0.43
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About

Archer-Daniels-Midland Company, widely recognized by its ticker symbol ADM, operates as a multinational entity in the agribusiness and food processing industry. Its primary activities encompass the provision of agricultural products, animal nutrition, and human nutrition, with a vast array of products and services to its name. ADM's business operations are segmented into three main categories: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The Ag Services and Oilseeds segment specializes in the procurement, merchandising, transportation,...

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Investment thesis

Bull case

  • Strong operating cash flow of 5.45B provides robust 0.56x coverage of total debt 9.76B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 45.64B provides 4.68x coverage of total debt 9.76B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 5.45B provides strong 65.69x coverage of stock compensation 83M, indicating sustainable incentive practices.
  • Robust free cash flow of 4.20B exceeds capital expenditure of 1.25B by 3.37x, indicating strong organic growth funding capability.
  • Strong operating cash flow of 5.45B provides 1.51x coverage of SG&A expenses 3.61B, showing efficient operational cost management.

Bear case

  • Operating cash flow of 5.45B barely covers its investment activities of (1.02B), with a coverage ratio of -5.36, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 1.01B against inventory of 10.37B, the 0.10 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 5.45B provides thin coverage of dividend payments of (987M) with a -5.52 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Short-term investments of 8.46B significantly exceed cash reserves of 1.01B, which is 8.34x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Operating earnings of 1.87B show weak coverage of depreciation charges of 1.18B, with a 1.59 ratio indicating high capital intensity and potential reinvestment needs.

Geographical Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Farm Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ADM Archer-Daniels-Midland Co 33.15 Bn 30.75 0.41 9.76 Bn
2 TSN Tyson Foods, Inc. 21.32 Bn 106.61 0.39 8.36 Bn
3 BG Bunge Global SA 15.29 Bn 238.98 0.33 17.78 Bn
4 CALM Cal-Maine Foods Inc 3.98 Bn 1,160.43 2.88 0.00 Bn
5 FDP Fresh Del Monte Produce Inc 2.34 Bn 23.44 0.67 0.34 Bn
6 DOLE Dole plc 1.56 Bn 105.27 0.17 1.33 Bn
7 VITL Vital Farms, Inc. 1.26 Bn 20.76 1.77 0.06 Bn
8 AGRO Adecoagro S.A. 0.87 Bn 37.23 0.63 1.61 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.78 0.83
EV to Cash from Ops. EV/CFO 7.54 2.92
EV to Debt EV to Debt 4.21 3.55
EV to EBIT EV/EBIT 21.97 0.40
EV to EBITDA EV/EBITDA 19.29 -24.51
EV to Free Cash Flow [EV/FCF] EV/FCF 9.78 1.40
EV to Market Cap EV to Market Cap 1.24 3.04
EV to Revenue EV/Rev 0.51 0.77
Price to Book Value [P/B] P/B 1.46 0.54
Price to Earnings [P/E] P/E 30.75 89.91
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.09 -21.77
Dividend Payout Ratio % Div Payout % (Qtr) 91.50 42.88
Dividend per Basic Share Div per Share (Qtr) 2.04 0.97
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 23.49 6.76
Interest Coverage Int. cover (Qtr) 3.06 -31.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 20.15 -1,577.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 66.12 86.77
Dividend Growth (1y) % Div 1y % (Qtr) 1.49 11.26
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -32.09 -87.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -20.09 -202.55
EBIT Growth (1y) % EBIT 1y % (Qtr) -37.22 -99.71
EBT Growth (1y) % EBT 1y % (Qtr) -44.64 -133.79
EPS Growth (1y) % EPS 1y % (Qtr) -39.07 -151.42
FCF Growth (1y) % FCF 1y % (Qtr) 242.62 135.44
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -12.89 -28.83
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.53 1.37
Cash Payout Ratio Cash Payout (Qtr) 0.15 0.12
Cash Ratio Cash Ratio (Qtr) 0.05 0.98
Current Ratio Curr Ratio (Qtr) 1.37 2.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.43 -1.90
Interest Cover Ratio Int Coverage (Qtr) 3.06 -31.98
Times Interest Earned Times Interest Earned (Qtr) 3.06 -31.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.80 691.86
EBIT Margin % EBIT Margin % (Qtr) 2.33 650.76
EBT Margin % EBT Margin % (Qtr) 1.57 644.45
Gross Margin % Gross Margin % (Qtr) 6.30 -69.17
Net Profit Margin % Net Margin % (Qtr) 1.30 644.34