Archer Daniels Midland -Last Friday I took advantage of market softness. I have been on the hunt for good stocks that are not in the energy sector so I can get my portfolio back in balance. I made 4 purchases on Friday. My latest stock buys were WMT, CMI, MGA, and ADM which is the stock I am writing about on this post. I bought 75 shares of Archer Daniels Midland, (NYSE: ADM), for $34.14, totaling $2,560.50. This buy adds $84 to my annual dividend income.
Archer Daniels Midland Overview
Archer-Daniels-Midland Company is a processor of oilseeds, corn, wheat, cocoa, and other agricultural commodities and manufactures protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other value-added food and feed ingredients. The Company’s segments include Oilseeds Processing, Corn Processing, Agricultural Services and Wild Flavors and Specialty Ingredients. The Corn Processing segment is engaged in corn wet milling and dry milling activities. The Agricultural Services segment utilizes its United States grain elevator , global transportation network and port operations to buy, store, clean and transport agricultural commodities, such as oilseeds, corn, wheat, milo, oats, rice and barley, and resells these commodities primarily as food and feed ingredients and as raw materials for the agricultural processing industry. Wild Flavors’ products include flavors, colors, sweeteners and health ingredients, as well as ready-to-market concepts and complete solutions. Source: www.schwab.com.
Archer Daniels Midland Dividends
- Annual Dividend Yield of 3.27%
- Annual Dividend Rate (IAD) $1.12
- Payout Ratio (TTM) of 36.79%
- Dividend Coverage Ratio (TTM) of 271.81%
The chart below shows the past eight years of dividend history for Archer Daniels Midland. As shown, ADM has consistently increased its dividend on an annual basis.
Archer Daniels Midland Valuation
- S&P Capital IQ ranks ADM as 3-stars, a hold with a fair value calculation of $36.60 and a 12-month target price of $45.
- Morningstar ranks ADM as a buy, 4-stars with a fair value of $49.
- Argus ranks ADM as buy, with a $61 price target.
The F.A.S.T Graph below shows that Archer Daniels Midland is slightly below blue line. For those of you unfamiliar with this tool, when the black line falls below the blue line this indicates a stock is undervalued. The blue line is the typical P/E Ratio of the stock. ADM has not fallen bellow the blue line since 2102.
Source: fastgraphs.com rc=”//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js”>
Archer Daniels Midland has been a popular stock among the DGI blogging community the past few months. This popularity is warranted, as the stock value is down 35% YTD. I have wanted to buy but I needed to wait on capital first. I’m happy I waited because the price has dropped a few dollars since I added it to my radar. This buy, along with the other three I made last week will help reduce my portfolio over allocation of funds in the energy sector.
What do you think of Archer Daniels Midland? Which stocks are you buying now?
Full Disclosure: Long ADM