Comparing Archer Daniels Midland (NYSE:ADM) & FMC (NYSE:FMC)

Archer Daniels Midland (NYSE:ADM) and FMC (NYSE:FMC) are both consumer staples companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

Archer Daniels Midland pays an annual dividend of $2.04 per share and has a dividend yield of 3.2%. FMC pays an annual dividend of $2.32 per share and has a dividend yield of 7.6%. Archer Daniels Midland pays out 89.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. FMC pays out 290.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Archer Daniels Midland has raised its dividend for 53 consecutive years.

Institutional & Insider Ownership

78.3% of Archer Daniels Midland shares are held by institutional investors. Comparatively, 91.9% of FMC shares are held by institutional investors. 1.2% of Archer Daniels Midland shares are held by insiders. Comparatively, 0.7% of FMC shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for Archer Daniels Midland and FMC, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Archer Daniels Midland	1	7	1	0	2.00
FMC	1	8	5	0	2.29

Archer Daniels Midland currently has a consensus target price of $55.50, indicating a potential downside of 12.46%. FMC has a consensus target price of $42.08, indicating a potential upside of 38.00%. Given FMC’s stronger consensus rating and higher probable upside, analysts clearly believe FMC is more favorable than Archer Daniels Midland.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Archer Daniels Midland	1.33%	8.43%	3.55%
FMC	2.42%	9.36%	3.51%

Risk and Volatility

Archer Daniels Midland has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, FMC has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500.

Valuation and Earnings

This table compares Archer Daniels Midland and FMC”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	$85.53 billion	0.36	$1.80 billion	$2.27	27.93
FMC	$4.25 billion	0.90	$341.10 million	$0.80	38.12

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

Summary

FMC beats Archer Daniels Midland on 10 of the 17 factors compared between the two stocks.

About Archer Daniels Midland

Archer-Daniels-Midland Company engages in the procurement, transportation, storage, processing, and merchandising of agricultural commodities, ingredients, flavors, and solutions in the United States, Switzerland, the Cayman Islands, Brazil, Mexico, Canada, the United Kingdom, and internationally. It operates in three segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The company originates, merchandises, stores, and transports agricultural raw materials, such as oilseeds and soft seeds. It also engages in the agricultural commodity and feed product import, export, and distribution; and various structured trade finance activities. In addition, the company offers soybean meal and oil; vegetable and salad oils and protein meals; ingredients for the food, feed, energy, and industrial customers; margarine, shortening, and other food products; and partially refined oils to produce biodiesel and glycols for use in chemicals, paints, and other industrial products. Further, it provides peanuts, peanut-derived ingredients, and cotton cellulose pulp; sweeteners, corn and wheat starches, syrup, glucose, wheat flour, and dextrose; alcohol, and other food and animal feed ingredients; ethyl alcohol and ethanol; corn gluten feed and meal; distillers' grains; corn germ; and citric acids. Additionally, the company provides proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, postbiotics, enzymes, and botanical extracts; and other specialty food and feed ingredients; edible beans; formula feeds, and animal health and nutrition products; and contract and private label pet treats and food products. It also offers futures commission merchant; commodity brokerage services; cash margins and securities pledged to commodity exchange clearinghouse; and cash pledged as security under certain insurance arrangements. The company was founded in 1902 and is headquartered in Chicago, Illinois.

About FMC

FMC Corporation, an agricultural sciences company, provides crop protection, plant health, and professional pest and turf management products. It develops, markets, and sells crop protection chemicals that includes insecticides, herbicides, and fungicides; and biologicals, crop nutrition, and seed treatment products, which are used in agriculture to enhance crop yield and quality by controlling a range of insects, weeds, and diseases, as well as in non-agricultural markets for pest control. The company markets its products through its own sales organization and through alliance partners, independent distributors, and sales representatives. It operates in North America, Latin America, Europe, the Middle East, Africa, and Asia. The company was founded in 1883 and is headquartered in Philadelphia, Pennsylvania.