Archer Daniels Midland (NYSE: ADM) and McCormick & Company, Incorporated (NYSE:MKC) are both large-cap consumer staples companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, institutional ownership, earnings and risk.
This table compares Archer Daniels Midland and McCormick & Company, Incorporated’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Archer Daniels Midland||2.01%||7.86%||3.49%|
|McCormick & Company, Incorporated||10.05%||26.09%||8.17%|
75.9% of Archer Daniels Midland shares are owned by institutional investors. Comparatively, 76.3% of McCormick & Company, Incorporated shares are owned by institutional investors. 2.7% of Archer Daniels Midland shares are owned by company insiders. Comparatively, 15.3% of McCormick & Company, Incorporated shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Archer Daniels Midland pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. McCormick & Company, Incorporated pays an annual dividend of $1.88 per share and has a dividend yield of 1.8%. Archer Daniels Midland pays out 59.8% of its earnings in the form of a dividend. McCormick & Company, Incorporated pays out 51.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Archer Daniels Midland has raised its dividend for 30 consecutive years and McCormick & Company, Incorporated has raised its dividend for 41 consecutive years.
Risk & Volatility
Archer Daniels Midland has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, McCormick & Company, Incorporated has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.
Valuation & Earnings
This table compares Archer Daniels Midland and McCormick & Company, Incorporated’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Archer Daniels Midland||$62.35 billion||0.37||$1.28 billion||$2.14||19.30|
|McCormick & Company, Incorporated||$4.41 billion||3.03||$472.30 million||$3.62||28.22|
Archer Daniels Midland has higher revenue and earnings than McCormick & Company, Incorporated. Archer Daniels Midland is trading at a lower price-to-earnings ratio than McCormick & Company, Incorporated, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for Archer Daniels Midland and McCormick & Company, Incorporated, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Archer Daniels Midland||1||6||1||0||2.00|
|McCormick & Company, Incorporated||0||6||3||0||2.33|
Archer Daniels Midland presently has a consensus target price of $41.57, suggesting a potential upside of 0.63%. McCormick & Company, Incorporated has a consensus target price of $105.75, suggesting a potential upside of 3.53%. Given McCormick & Company, Incorporated’s stronger consensus rating and higher possible upside, analysts plainly believe McCormick & Company, Incorporated is more favorable than Archer Daniels Midland.
McCormick & Company, Incorporated beats Archer Daniels Midland on 13 of the 17 factors compared between the two stocks.
Archer Daniels Midland Company Profile
Archer-Daniels-Midland Company is a processor of oilseeds, corn, wheat, cocoa and other agricultural commodities. The Company manufactures protein meal, vegetable oil, corn sweeteners, flour, biodiesel, ethanol, and other food and feed ingredients. Its segments include Agricultural Services, which utilizes its United States grain elevator, global transportation network and port operations to buy, store, clean and transport agricultural commodities, such as oilseeds, 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; Corn Processing, which is engaged in corn wet milling and dry milling activities; Oilseeds Processing, which includes global activities related to the origination, merchandising, crushing and further processing of oilseeds; Wild Flavors and Specialty Ingredients products, which include flavors, sweeteners and health ingredients; Other, and Corporate.
McCormick & Company, Incorporated Company Profile
McCormick & Company, Incorporated is engaged in manufacturing, marketing and distributing spices, seasoning mixes, condiments and other flavorful products to the food industry, including retailers, food manufacturers and foodservice businesses. The Company’s segments include consumer and industrial. The Company is involved in the manufacturing and sales of flavorful products. As of November 30, 2016, it offered brands for consumers in approximately 150 countries and territories. The Company’s brands in the Americas include McCormick, Lawry’s, and Club House, as well as brands, such as Gourmet Garden and OLD BAY. It provides a range of products to food manufacturers and foodservice customers. The Company’s sales, distribution and production facilities are located in North America, Europe and China. It markets regional and ethnic brands, such as Zatarain’s, Stubb’s, Thai Kitchen and Simply Asia. The Company offers sensory testing, culinary research, food safety and flavor application.
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