Archer-Daniels-Midland (NYSE: ADM) and Ingredion (NYSE:INGR) are both mid-cap consumer staples companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation & Earnings

This table compares Archer-Daniels-Midland and Ingredion’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Archer-Daniels-Midland $62.26 billion 0.37 $2.70 billion $2.38 17.34
Ingredion $5.80 billion 1.51 $1.05 billion $6.65 18.31

Archer-Daniels-Midland has higher revenue and earnings than Ingredion. Archer-Daniels-Midland is trading at a lower price-to-earnings ratio than Ingredion, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and price targets for Archer-Daniels-Midland and Ingredion, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Archer-Daniels-Midland 1 5 2 0 2.13
Ingredion 0 3 2 0 2.40

Archer-Daniels-Midland currently has a consensus target price of $43.83, indicating a potential upside of 6.21%. Ingredion has a consensus target price of $141.67, indicating a potential upside of 16.37%. Given Ingredion’s stronger consensus rating and higher probable upside, analysts plainly believe Ingredion is more favorable than Archer-Daniels-Midland.

Dividends

Archer-Daniels-Midland pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. Ingredion pays an annual dividend of $2.00 per share and has a dividend yield of 1.6%. Archer-Daniels-Midland pays out 53.8% of its earnings in the form of a dividend. Ingredion pays out 30.1% 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 41 consecutive years and Ingredion has raised its dividend for 4 consecutive years. Archer-Daniels-Midland is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Archer-Daniels-Midland and Ingredion’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Archer-Daniels-Midland 2.22% 8.40% 3.71%
Ingredion 8.35% 20.84% 9.53%

Institutional and Insider Ownership

73.7% of Archer-Daniels-Midland shares are held by institutional investors. Comparatively, 84.5% of Ingredion shares are held by institutional investors. 2.7% of Archer-Daniels-Midland shares are held by company insiders. Comparatively, 1.9% of Ingredion shares are held 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.

Volatility & Risk

Archer-Daniels-Midland has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Ingredion has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Summary

Ingredion beats Archer-Daniels-Midland on 10 of the 16 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.

Ingredion Company Profile

Ingredion Incorporated is an ingredients solutions provider. The Company manufactures and sells sweetener, starches, nutrition ingredients and biomaterial solutions derived from the wet milling and processing of corn and other starch-based materials to a range of industries, both domestically and internationally. It operates through four segments: North America, South America, Asia Pacific, and Europe, Middle East and Africa (EMEA). It turns corn, tapioca, potatoes, and other vegetables and fruits into ingredients and biomaterials for the food, beverage, paper and corrugating, brewing and other industries. Its product line includes animal feed products and edible corn oil. Its sweetener products include glucose syrups, high maltose syrup, high fructose corn syrup (HFCS), caramel color, dextrose, polyols, maltodextrins and glucose and syrup solids. Its starch-based products include both food-grade and industrial starches, and biomaterials. It also offers specialty ingredients.

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