First and foremost is that Archer operates in a highly competitive field. For example, company earnings fell 18% in 2015. In fact, right now Archer Daniels Midland’s dividend yield is higher than 76% of its global peers and in the top 5% of its own yield over the last two decades. While management appears to be making the right capital allocation moves to gradually diversify the company into higher-returning areas that are less susceptible to swings in commodity prices, these actions also suggest that management might be less optimistic about some of Archer Daniel’s existing operations. SPDR® S&P Euro Dividend Aristocrats UCITS ETF (EUR) - Exchange Traded Fund - ETF - Rating e analisi Morningstar, rendimenti e grafici Combined with ongoing cost cutting and higher specialty segment margins, as well as share buybacks (4.6% annually over the past five years), this should allow ADM to hopefully achieve low to mid-single-digit annual EPS growth over time, although the path almost certainly won’t be linear given all of the macro sensitivities the business has. These metrics are important because Archer operates in a highly capital intensive industry, one that’s also cyclical and characterized by razor-thin margins. Archer-Daniels-Midland Co (ADM) Valuation Archer-Daniels-Midland Co’s current dividend yield of 2.90% is -4% below its 5-year average. The next step would be to leverage the company’s world-spanning supply chain and large capital resources to launch numerous specialty products, which management believes can achieve at least $1 billion in new annual sales. In this case, total expected returns are 7.5%-8% per year over the next five years, a solid risk-adjusted rate of return for Archer Daniels Midland investors. Next up in the 2020 edition is Archer Daniels Midland (ADM). You can see a full downloadable spreadsheet of all 57 Dividend Aristocrats, along with several important financial metrics such as price-to-earnings ratios, by clicking on the link below: Click here to download your Dividend Aristocrats Excel Spreadsheet List now. While Archer Daniels Midland is generally a low-risk dividend growth stock, that doesn’t mean that investors don’t have several concerns to consider. }); Below is a closer look at five UK stocks, members of the S&P UK High Yield Dividend Aristocrats Index, that boast attractive yields, solid prospects for dividend growth, and an upside potential. Archer Daniel Midland’s 10 year average price-to-book ratio is 1.36. Dividend.com: The #1 Source For Dividend Investing. Such consistent and secure dividend growth is mostly a result of two factors. Dividend Safety Scores range from 0 to 100, and conservative dividend investors should stick with firms that score at least 60. So we need to form a view on if a company's dividend is sustainable, relative to its net profit … Dividends are usually paid out of company earnings. S&P 500® Dividend Aristocrats® measure the performance of S&P 500 companies that have increased dividends every year for the last 25 consecutive years. Dividend Aristocrats Weighting: This Dividend Aristocrats portfolio utilizes a equal level of stock weighting, with the highest dividend paying companies. Best Dividend Aristocrat Stocks to Buy Now Include — Archer Daniels Midland (NYSE: ADM) One of the best dividend-paying stocks to buy is Archer Daniels Midland, a global food processing and commodities trading corporation that offers a 3.65% dividend yield. It modestly outperformed the SPDR S&P 500 ETF (SPY) for the month. L’indice replica la performance dell’indice sottostante acquistando tutti i componenti dello stesso (replica totale). Find the latest dividend history for Archer-Daniels-Midland Company Common Stock (ADM) at Nasdaq.com. Dividendi Standard ETF: lista completa dei dividendi relativi a Spdr S&P Euro Div Aristocrats Ucits Etf, quotato in Borsa Italiana. listeners: [], Click here to download your Dividend Aristocrats Excel Spreadsheet List now, 2008 earnings-per-share of $2.84 (19% increase), 2009 earnings-per-share of $3.06 (7.7% increase). Altogether, Archer Daniels’ dividend appears to be very safe. At its innovation centers, the company conducts research and development on how to more effectively respond to changes in customer demand, and improving processing efficiency. LSE:ADM Historic Dividend September 17th 2020 Payout ratios. Many of those companies also exhibit consistent growth in value which is what you want along with dividend … In total, the company has taken a number of actions to right the ship over the past several years. We rate the stock a buy. Finally, and most importantly in a commodity industry such as this, management is laser focused on achieving large scale cost reductions through numerous avenues, including synergies with the large number of recent acquisitions. Based on 2019 book value of $35 per share, the stock has a current price-to-book ratio of 1.3. This acquisition will increase Archer Daniels Midland’s origination, storage, and destination market capabilities in the U.K. Archer Daniels Midland is also expanding its animal nutrition business. Terms of Service | Archer Daniels Midland, despite its dividend aristocrat status, ultimately depends on a number of factors outside of the company’s control – corn and soybean prices, oil prices, ethanol regulations, and government subsidies. It has continued to generate profits and reward shareholders with rising dividends along the way. The Origination and Nutrition segments comprise 16% and 10% of operating profit, respectively. Archer Daniels Midland is finally coming out of a prolonged downturn. As a result, ADM’s current forward P/E ratio of 15.4 is much lower than the industry average of 20.2 and below the S&P 500’s forward P/E of 17.8. I dividendi sono distribuiti agli investitori (Trimestralmente). That’s why dividend aristocrats have become a favorite among income investors, because with their long-term (25+ years) streaks of annual dividend growth, aristocrats can be a great starting place to look for the kind of steady blue chips that have done so well in the past. SPDR® S&P US Dividend Aristocrats UCITS ETF Dis (EUR) - Exchange Traded Fund - ETF - Rating e analisi Morningstar, rendimenti e grafici The company’s global distribution system provides the company with high margins and barriers to entry. Replicating the company’s physical footprint; fleet of trucks, trailers, tank cars, river barges, towboats, and vessels used to transport its products; and its logistical expertise would be nearly impossible. In turn, this allows Archer Daniels Midland to remain highly profitable, even during industry downturns. 1. A dividend aristocrat is a company that not only pays a dividend consistently but continuously increases the size of its payouts to shareholders. However, the number of uncontrollable macro factors the company depends on for pricing many of its products and generating an acceptable return is still a major risk. That means that its sales, earnings, and cash flow are driven by factors largely out of its control, including the weather, commodity prices (especially the prices of soybeans, corn, and oilseeds), and government agricultural policies. event : event, Future returns will also be derived from earnings growth, and dividends. However, for a company with such high reliance on commodity prices and government subsidies, ADM seems more like a trading stock to me rather than a core long-term investment – even despite its quality management team and strong balance sheet. Fortunately, industry conditions have improved recently, which could pave the way for a recovery in the future. With that said, the company has a long history of navigating through challenging periods. These 57 are large, US companies that have historically provided (slightly) better performance and (slightly) lower volatility … That’s why management has wisely chosen to take a conservative approach to debt over the decades, resulting in Archer Daniels having a below average leverage ratio (Debt/EBITDA), low debt/capital ratio, and a strong (double digit) interest coverage ratio. Despite the declining profitability, management remains optimistic about its outlook as it continues to progress on its strategic growth initiatives in flexitarian diets, nutrition for health, and sustainable materials. if (!window.mc4wp) { As a result, the stock appears to be a bit undervalued at current prices on the basis of book value, our preferred valuation metric for this particular stock. Some of the company’s end products include vegetable oil, protein meal, flour, corn sweeteners, starch, ethanol, and other food and feed ingredients. According to its Investor Relations site, the company has grown its dividend from 8 cents per share in 1990 to $3.28 in 2019. This is a benefit of remaining consistently profitable during industry downturns—the company can use some of its excess cash flow to repurchase shares at lower prices. The stock trades at a slight discount to its historical price-to-book ratio and pays a solid 3.0% dividend plus annual dividend increases. The list itself is maintained by the S&P and updated every year. And since Archer Daniels is essentially a middleman between farms and consumers, it is unable to achieve any kind of moat, meaning significant pricing power. On January 17th, 2019 the company announced it will acquire the remaining 50% stake in its Gleadell Agriculture Ltd. joint venture, including Dunns Ltd. Archer Daniels Midland will combine its existing U.K. origination operations with the newly acquired businesses to create ADM Agriculture Ltd. Consider the criteria for a second – the companies on the list have all increased their dividends each year for at least twenty-five years. Archer Daniels Midland has increased its dividend each year for over 30 years in a row, and in total has paid uninterrupted quarterly dividends to shareholders for 87 years. on: function (event, callback) { Of course, the trick is to be able to carefully select the best quality companies, those with high-quality management teams, strong balance sheets, predictable businesses, and dividend-friendly corporate cultures. IBM is certainly a Dividend Aristocrat. Starting in 2012, management initiated a long-term turnaround plan that involved two main strategies. There will always be a certain level of demand for Archer Daniels Midland’s products. callback: callback ADM’s stock sits near its 52-week low price and yields 3.1% after falling by more than 30% over the past year. From a dividend perspective, the payout looks quite safe. In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, which created Archer Daniels Midland. Conditions did not improve much in 2016. Investors can learn more about all of the dividend aristocrats here. I first stumbled upon the Dividend Aristocrats index in late 2007, and instantly understood why dividend growth investing is such a powerful wealth generating tool.If someone had invested in the Dividend Aristocrats index after reading my review of the list at the beginning of 2008, they would have tripled their money.An investment in the dividend … Despite the revenue growth, operating profit was down 14.0% and earnings-per-share declined by 16.4% year-over-year. With that said, the company’s dividend remains very safe and offers reasonable growth prospects, but shareholders ultimately need to be optimistic about macro headwinds abating and ethanol mandates remaining favorable. Archer Daniels Midland has an unparalleled global transportation network, which serves as a huge competitive advantage. Archer Daniels Midland appears to be undervalued today. The previous Admiral Group dividend was 36.2p and it went ex 3 months ago and it was paid 2 months ago. First, ADM would sell off non-core businesses (i.e. window.mc4wp.listeners.push({ That level of earnings growth should likely translate to around mid-single-digit annual dividend increases over the long-term. For example, in 2011 and 2012 the severe drought in the U.S. resulted in far less demand for food processing (due to crop failures), which had a large negative impact on its operating profits. Our Dividend Growth Score answers the question, “How fast is the dividend likely to grow?” It considers many of the same fundamental factors as the Safety Score but places more weight on growth-centric metrics like sales and earnings growth and payout ratios. Each year, we review all 57 Dividend Aristocrats. In late October (10/31/19) the company reported third quarter results. As a result, Archer Daniels Midland appears to be a slightly undervalued dividend growth stock. Especially with shares offering a dividend yield that is near its highest level in 20 years. That’s because, thanks to the highly commoditized nature of this industry, as well as the cyclical nature of agricultural products, Archer’s margins and return on shareholder capital can be highly volatile. Furthermore, industry conditions have finally improved, which is setting the stage for a return to growth. Over the past year, concerns over ADM’s short-term growth has resulted in shares underperforming the S&P 500 by close to 20%. Specifically, that includes increased demand for soybeans and grains (from long-term rising meat demand in emerging markets) and ADM’s move towards specialty foods, which should allow long-term sales growth in the low single digits. Most notably, Archer Daniels Midland’s core operations – procuring, storing, processing, and selling various agricultural commodities – are extremely capital intensive. The 5-year average dividend yield is 3.03% (see red-line in chart). The company has the largest grain terminal and shipping network in the country and maintains hundreds of processing plants and storage facilities around the world, for example. The company has a $26 billion market capitalization. These capabilities allow Archer Daniels Midland to be the lowest cost and fastest provider of its commodities and processed products to many customers’ facilities, where it delivers directly. NOBL generated total returns of -0.6% in August of 2019 2. At the end of the day, the basic investment thesis for food companies such as Archer Daniels Midland is simple: everyone has to eat. L’indice replica la performance dell’indice sottostante acquistando tutti i componenti dello stesso (replica totale). That included investing $200 million into expanding Australia’s grain export infrastructure (Australia is the world’s 3rd largest grain exporter behind the US and Canada) and limiting annual increases in silo fees. That’s not surprising given the company’s strong, long-term payout growth rates over the decades. We analyze 25+ years of dividend data and 10+ years of fundamental data to understand the safety and growth prospects of a dividend. The Nutrition segment saw the highest year-over-year revenue increase with 58.0% growth thanks to growing demand for plant-based protein. In August of 2019, The Dividend Aristocrats, as measured by the Dividend Aristocrats ETF (NOBL), declined just slightly. Dividend Aristocrats also must have a non-negative dividend payout ratio and a float-adjusted market capitalization of at least $1 billion. In fact, 2019 is the 24th year in a row IBM has increased its quarterly cash dividend. However, while these underlying mega-trends may be true, that doesn’t necessarily translate to steady growth in sales, earnings, or free cash flow (FCF) for companies such as Archers Daniel Midland. Since tracking the data, companies cutting their dividends had an average Dividend Safety Score below 20 at the time of their dividend reduction announcements. 25 or more years of DIVIDEND GROWTH! The remaining 2% of operating profit is derived from a non-core ‘other’ segment. The strong U.S. dollar and the decline in agricultural commodity prices, such as corn, weighed on the company’s profitability for several years. Even if commodity prices weaken further, it’s hard to imagine a scenario that jeopardizes ADM’s dividend. Very few companies can boast such a performance, in one of the worst economic downturns in U.S. history. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. Plus growth, cover and dividend yield. It’s simple, the companies in the list must have increased their dividends every year for 25 years. forms : { The company’s book value is far more stable and gives a better idea of the company’s ‘real’ value relative to its history. Founded in 1898 in Chicago, Illinois, Archer Daniels Midland is one of the world’s largest food procurers, transporters, storage, processors, and sellers of agricultural commodities and products through its global network of processing plants, storage facilities, and transportation vehicles. At Sure Dividend, we are big believers that the best stocks to buy and hold to generate long-term wealth, have a number of qualities in common. Archer Daniels Midland has built significant competitive advantages over the years. Archer-Daniels-Midland operates in 160 countries and generates annual revenue above $64 billion. Archer Daniels Midland has encountered a difficult operating environment. Let’s take a look at Archer Daniels Midland (ADM), one of the oldest and most time-tested members of this group (with 41 straight years of payout growth to its name), to see if this boring agricultural giant might be appropriate for a diversified dividend growth portfolio. The Index treats each constituent as a distinct investment opportunity without regard to its size by equally weighting each company. NOBL has generated total retu… Dividend Aristocrats ETFs Buying shares of a dividend aristocrat ETF can help you invest in dividend aristocrat stocks more easily and cheaply. Meanwhile, ADM’s current dividend yield of 3.1%, in addition to being much higher than the market’s 2.0% payout, is also much greater than the industry median (1.9%), as well as the company’s own 22-year average payout of 1.9%. Historically, dividend growth investing has been one of the best ways for regular people to compound their wealth and income over time. Today, it is an agricultural giant. Remember that Archer operates globally, which means that its long-term plans to diversify internationally need to be approved by foreign regulators, something that is far from certain. Archer Daniels Midland has had some tough times in the past several years. Archer Daniels Midland was founded in 1902, when George A. Archer and John W. Daniels began a linseed crushing business. At today’s share price, long-term income investors can probably expect annual total returns of about 7% to 9% (3.0% yield + 4% to 6% earnings growth), assuming macro conditions do not structurally change for the worse. L’indice di spesa complessiva è pari allo 0,30% annuo. It also ranks among the elite Dividend Aristocrats … Archer Daniels Midland’s total sales fell 7.9% in 2016, along with a 27% decline in diluted earnings-per-share. Dividend Aristocrat Series! Archer-Daniels Midland has paid a dividend since 1927 and increased its dividend for 44 consecutive years; qualifying the company as a Dividend Aristocrat and Dividend Champion. Better yet, find one of those stellar aristocrat with a consistent dividend growth rate about 10% and you have a golden goose. We wrote a detailed analysis reviewing how Dividend Safety Scores are calculated, what their real-time track record has been, and how to use them for your portfolio here. Earnings-per-share during the Great Recession are below: Archer Daniels Midland’s earnings-per-share increased in 2008 and 2009, during the Great Recession. Archer Daniels Midland also frequently divests low-growth businesses, to further improve its portfolio. The company has four main business segments: Archer Daniels Midland has been in business for more than 100 years and isn’t going away anytime soon thanks to several competitive advantages. Disclaimer | The answer lies in management’s long-term focus and adaptability to rapidly-changing market conditions. In addition, the company’s large scale and strong financial position continues to bode well for its long-term dividend growth outlook, thanks to management factoring in consistent payout growth into its long-term capital allocation plans. Then again, this has always been the case, so how exactly has Archer Daniels been able to deliver an impressive 41 straight years of dividend growth in this boom/bust industry? This investment included building six new plants, five innovation centers and labs, 17 acquisitions, and four joint ventures. Overall, it’s hard not to like the transition Archer Daniels Midland is making, and its set of hard assets is very difficult to replicate. Such consistent and secure dividend growth is mostly a result of two factors. It is an industry giant, with 450 crop procurement locations, 270 food and feed ingredient manufacturing facilities, and 46 innovation centers. About Us | Another risk is U.S. agricultural policy, specifically corn subsidies and ethanol mandates, which have resulted in corn becoming Archer’s largest and most important product over the past few decades. Since 2014, Archer Daniels Midland invested more than $5 billion in new growth projects. Any future reversal of these subsidies or decreased ethanol mandates (which cost U.S. consumers $6 billion a year in higher gas costs) could leave Archer in a very uncomfortable position, having to once again restructure its fundamental business model. Indeed, its share price today is actually below where it was exactly five years ago. The company produces a wide range of products and services, designed to meet the growing demand for food due to rising populations. However – despite the sector headwinds – the company has remained steadily profitable and has raised its dividend annually, including a 4.5% increase in February 2019. Earnings will also be boosted by the company’s share buybacks. The company’s dividend is also currently quite safe thanks to sound business fundamentals. After all, ADM has been around for … In fact, about 43% of ADM’s sales are from heavily subsidized agricultural products.