ADP is a member of the S&P 500 Dividend Aristocrats index since it has raised its dividends for 45 years in a row, without missing a single year. With razor-thin operating margins in this commodity industry, there is no room for inefficiencies. 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. The list itself is maintained by the S&P and updated every year. Dividendi Standard ETF: lista completa dei dividendi relativi a Spdr S&P Euro Div Aristocrats Ucits Etf, quotato in Borsa Italiana. I dividendi sono distribuiti agli investitori (Semestralmente). SPDR® S&P Euro Dividend Aristocrats UCITS ETF (EUR) - Exchange Traded Fund - ETF - Rating e analisi Morningstar, rendimenti e grafici ADM does not warrant or guarantee the accuracy or completeness of the information disclosed herein, and under no circumstances will ADM be liable for any loss or direct, indirect, incidental, special or consequential damages caused by reliance or use of the information disclosed herein, or for the risks of the stock market. The good news is, Archer Daniels Midland remained profitable throughout the industry downturn, thanks to cost controls. As a result, Archer Daniels Midland appears to be a slightly undervalued dividend growth stock. Contact Us, COPYRIGHT © 2017 Simply Safe Dividends LLC, Archer Daniels Midland (ADM): A Dividend Aristocrat Trading at Some of the Best Valuations in 20 Years, Pfizer’s COVID-19 Vaccine Shows Promise; Spin-off to Execute November 13 With Dividend Adjustment Next Quarter, Dominion’s Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares, AltaGas’s Falling Leverage Supports Dividend But Firm Will Evaluate Splitting Off Midstream Business, Altria’s Tobacco Business Remains Resilient But Longer-term Growth Uncertainties Linger, some of the most important financial factors. This gives way to economies of scale and efficiencies in production and distribution. 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. The Index treats each constituent as a distinct investment opportunity without regard to its size by equally weighting each company. In particular, the decline in agriculture commodity prices eroded Archer Daniels’ earnings for several years, while the lingering trade war represents an additional headwind. That’s especially true with a growing global population and with faster-growing emerging markets (such as China) whose middle classes are increasingly consuming more western style diets. Archer Daniels Midland has an unparalleled global transportation network, which serves as a huge competitive advantage. 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. It has continued to generate profits and reward shareholders with rising dividends along the way. 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. The first is that management has a stated long-term policy of paying out just 30% to 40% of EPS in dividends each year. Many of those companies also exhibit consistent growth in value which is what you want along with dividend … Each year, we review all 57 Dividend Aristocrats. 1. forms : { ADM operates on super thin margins which is an exemplification of the fact it operates without a moat. The reason for Archer Daniels Midland’s remarkable durability in recessions could be that grains still need to be processed and transported, regardless of the economic climate. When oil prices are low, ethanol demand declines, which hurts Archer Daniel Midland’s profits. First, ADM would sell off non-core businesses (i.e. 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. 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. Plus growth, cover and dividend yield. Such consistent and secure dividend growth is mostly a result of two factors. According to its Investor Relations site, the company has grown its dividend from 8 cents per share in 1990 to $3.28 in 2019. Fortunately, industry conditions have improved recently, which could pave the way for a recovery in the future. Today, it is an agricultural giant. 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%. Dividend Aristocrats also must have a non-negative dividend payout ratio and a float-adjusted market capitalization of at least $1 billion. 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. 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. In fact, about 43% of ADM’s sales are from heavily subsidized agricultural products. The company launched an aggressive cost-cutting program in 2015 that had produced $200 million in annual run-rate cost savings by 2018. Whenever we see dividend aristocrats such as ADM in these situations, we get excited – perhaps an excellent business is now on sale for long-term investors. Recent acquisitions are expected to boost growth in 2020. That’s not surprising given the company’s dividend aristocrat status, and the fact that Archer Daniels Midland is set to become a dividend king (50+ consecutive annual dividend increases) in just nine years. Archer Daniels Midland’s total sales fell 7.9% in 2016, along with a 27% decline in diluted earnings-per-share. Disclaimer | 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. The Nutrition segment saw the highest year-over-year revenue increase with 58.0% growth thanks to growing demand for plant-based protein. This indicates the stock looks reasonably valued today. A dividend aristocrat is a company that not only pays a dividend consistently but continuously increases the size of its payouts to shareholders. That decision came as a huge surprise to industry analysts, especially given the favorable economic relationships between the U.S. and Australia, as well as ADM’s various promises to help win support for the deal. Trading near their 52-week low, ADM’s shares are starting to look interesting. Source: Archer Daniels Midland Investor Presentation. Over the past year, concerns over ADM’s short-term growth has resulted in shares underperforming the S&P 500 by close to 20%. Earnings will also be boosted by the company’s share buybacks. In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, which created Archer Daniels Midland. 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. In late October (10/31/19) the company reported third quarter results. Terms of Service | Even if commodity prices weaken further, it’s hard to imagine a scenario that jeopardizes ADM’s dividend. The answer lies in management’s long-term focus and adaptability to rapidly-changing market conditions. Profits held up, even during the Great Recession. In February 2019, the company officially closed on its $1.8 billion acquisition of global animal nutrition leader Neovia. Archer Daniels Midland has encountered a difficult operating environment. The Dividend Aristocrats are S&P 500 index constituents that have increased the dividend paid for 25 consecutive years or more.. Most notably, Archer Daniels Midland’s core operations – procuring, storing, processing, and selling various agricultural commodities – are extremely capital intensive. 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. Updated on January 7th, 2020 by Samuel Smith. 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. Not only that, they also have shareholder-friendly management teams that are dedicated to raising their dividends each year. window.mc4wp = { From a dividend perspective, the payout looks quite safe. 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. In fact, 2019 is the 24th year in a row IBM has increased its quarterly cash dividend. window.mc4wp.listeners.push({ It is being negatively impacted by declining prices of agricultural commodities and oil, which has weighed on its earnings in recent years. Archer Daniels Midland is finally coming out of a prolonged downturn. And it’s not just U.S. government policy that is a risk. These metrics are important because Archer operates in a highly capital intensive industry, one that’s also cyclical and characterized by razor-thin margins. 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. 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. The Oilseeds segment is Archer Daniels Midland’s largest, at 44% of annual profits, followed by Carbohydrate Solutions at 28%. Accessing these long-term dividend payers can be done through individual stock names, mutual funds and ETFs designed to track various dividend aristocrat indices. The company’s book value is far more stable and gives a better idea of the company’s ‘real’ value relative to its history. 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. It modestly outperformed the SPDR S&P 500 ETF (SPY) for the month. Or more simply put, ADM helps to feed the world, thanks to its immense business and geographic diversification. Archer Daniels Midland’s profits are volatile and fluctuate with the price of grains and commodities like oil. As a result, Archer’s cash flow easily covers its debt and short-term obligations and explains why it has a very strong, investment-grade credit rating. The company has a $26 billion market capitalization. NOBL has generated total retu… Especially with shares offering a dividend yield that is near its highest level in 20 years. We expect Archer Daniels Midland to grow its future earnings by ~6% per year through 2024 and the stock has a current dividend yield of 3.0%. In fact, between 2013 and 2019 ADM hopes to cut over $1 billion in annual costs, including $275 million it achieved last year and another $250 million it’s on track to cut in 2017. Dividends are usually paid out of company earnings. That’s not surprising given the company’s dividend aristocrat status, and the fact that Archer Daniels Midland is set to become a dividend king (50+ consecutive annual dividend increases) in just nine years. Archer Daniel Midland’s 10 year average price-to-book ratio is 1.36. Such consistent and secure dividend growth is mostly a result of two factors. Find the latest dividend history for Archer-Daniels-Midland Company Common Stock (ADM) at Nasdaq.com. } } L’indice di spesa complessiva è pari allo 0,35% annuo. Archer Daniels Midland was founded in 1902, when George A. Archer and John W. Daniels began a linseed crushing business. Perhaps unsurprisingly, Archer Daniels is gradually shedding low-return operations and moving into areas of higher value in an attempt to structurally improve its return on capital and remove some of the price sensitivity of the business. Consider the criteria for a second – the companies on the list have all increased their dividends each year for at least twenty-five years. 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. Privacy Policy | Furthermore, industry conditions have finally improved, which is setting the stage for a return to growth. 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. (function() { Future returns will also be derived from earnings growth, and dividends. Dividend.com: The #1 Source For Dividend Investing. That’s not surprising given the company’s strong, long-term payout growth rates over the decades. With that said, the company has a long history of navigating through challenging periods. Based on 2019 book value of $35 per share, the stock has a current price-to-book ratio of 1.3. The strong U.S. dollar and the decline in agricultural commodity prices, such as corn, weighed on the company’s profitability for several years.