Financial Review: Darling Ingredients (DAR) versus Archer-Daniels-Midland (ADM)
Darling Ingredients (NYSE: DAR) and Archer-Daniels-Midland (NYSE:ADM) are both mid-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, analyst recommendations, profitability, dividends, institutional ownership and risk.
Earnings & Valuation
This table compares Darling Ingredients and Archer-Daniels-Midland’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Darling Ingredients||$3.52 billion||0.83||$428.51 million||$0.51||34.84|
|Archer-Daniels-Midland||$62.26 billion||0.39||$2.70 billion||$2.38||18.16|
Archer-Daniels-Midland has higher revenue and earnings than Darling Ingredients. Archer-Daniels-Midland is trading at a lower price-to-earnings ratio than Darling Ingredients, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
95.4% of Darling Ingredients shares are owned by institutional investors. Comparatively, 72.9% of Archer-Daniels-Midland shares are owned by institutional investors. 2.0% of Darling Ingredients shares are owned by insiders. Comparatively, 2.7% of Archer-Daniels-Midland shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility and Risk
Darling Ingredients has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500. Comparatively, Archer-Daniels-Midland has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.
Archer-Daniels-Midland pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Darling Ingredients does not pay a dividend. Archer-Daniels-Midland pays out 53.8% of its earnings in the form of a dividend. Archer-Daniels-Midland has raised its dividend for 41 consecutive years.
This is a summary of current ratings for Darling Ingredients and Archer-Daniels-Midland, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Darling Ingredients presently has a consensus price target of $18.60, indicating a potential upside of 4.67%. Archer-Daniels-Midland has a consensus price target of $42.67, indicating a potential downside of 1.26%. Given Darling Ingredients’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Darling Ingredients is more favorable than Archer-Daniels-Midland.
This table compares Darling Ingredients and Archer-Daniels-Midland’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Darling Ingredients beats Archer-Daniels-Midland on 9 of the 17 factors compared between the two stocks.
About Darling Ingredients
Darling Ingredients Inc. (Darling) is a developer and producer of sustainable natural ingredients from edible and inedible bio-nutrients, creating a range of ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy and fertilizer industries. The Company operates through three segments: Feed Ingredients, Food Ingredients and Fuel Ingredients. The Company collects and transforms all aspects of animal by-product streams into useable and specialty ingredients, such as gelatin, edible fats, feed-grade fats, animal proteins and meals, plasma, pet food ingredients, organic fertilizers, yellow grease, fuel feedstocks, green energy, natural casings and hides. In addition, the Company provides grease trap services to food service establishments, environmental services to food processors and sells restaurant cooking oil delivery and collection equipment.
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.
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