I do not see much discussion on the Archer Daniel Midlands Company (ADM).
Sector: Consumer Staples
Yield: 3.27
P/E 11.9
Dividend Growth Streak: 39 years
Payout Ratio 41.5%
3YR dividend growth rate: 13.6%
This stock has dropped by roughly a third this year due to commodity headwinds. However, even bearish forecasts for this stock don't indicate a drop in revenue/earnings for this stock (mostly flat forecast for 2016). With such a low P/E and payout ratio, this could be a good company to get cheap now and ride out the short term headwinds while collecting reliably increasing dividends. Thoughts?
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Interesting find.
M* likes them, Zacks hates them.
Gonna have to see/watch this.
Should be interesting to see what the pros on here think,
( I know i'm missing here)
Jimbo
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Ive been a shareholder in ADM for a couple of years now and was waiting for a pullback before I consider adding more....and looks like that pullback has come. A great company with excellent fundamentals.
The company is growing higher margins business segments with their acquisition of Wild Flavors. Another new joint-venture was announced this week expanding into EMEA region.
Positives - food production/transport/processing - stable, reliable, and falls squarely into the consumer staples sector. Last year or two, management has increased the buybacks and increased the payout ratio a bit (IIRC the target is 30-35%). They also have a big presence in China - as China gets richer, more protein consumption translates to higher demand for grains, soybeans etc (each kilogram of pork requires 6 kilogram of feed, according to a study).
Negatives - Falling commodities of course. Also, falling crude prices. With the fall in energy prices, the subsidies for biofuel are growing smaller - and some very strong arguments can be made for completely cutting them off. Other challenges?
Another alternative to consider in this space (again, very strong fundamentals) is Bunge Ltd (BG).
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ADM is one of my must haves in 2016, I've been watching this company all year.
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12-27-2015, 10:50 PM
(This post was last modified: 12-27-2015, 10:51 PM by Dividendsrule.)
I've liked them for years. ABCD- Archer Bunge Cargill Dreyfus. The only 4 big commodities and grain shippers around.
All of that ethanol is silly, but I guess it helps our farmers.
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I looked at them a couple of weeks ago. Too many headwinds, my main concern being the whole "lets eat healthy food" movement which usually excludes processed stuff. Also a big portion of their income comes from products with significant government subsidies... some which are going to be around for a while, some which might get cancelled.
I'll keep my eyes open but right now ADM is not a company that I want to invest in. Not saying the company is bad, I just think there are better options out there.
