Archer Daniels Midland (NYSE:ADM – Get Free Report) and J. M. Smucker (NYSE:SJM – Get Free Report) are both large-cap consumer staples companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.
Dividends
Archer Daniels Midland pays an annual dividend of $2.08 per share and has a dividend yield of 2.5%. J. M. Smucker pays an annual dividend of $4.48 per share and has a dividend yield of 3.7%. Archer Daniels Midland pays out 57.0% of its earnings in the form of a dividend. J. M. Smucker pays out 209.3% 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 increased its dividend for 53 consecutive years and J. M. Smucker has increased its dividend for 27 consecutive years.
Institutional and Insider Ownership
78.3% of Archer Daniels Midland shares are owned by institutional investors. Comparatively, 81.7% of J. M. Smucker shares are owned by institutional investors. 0.6% of Archer Daniels Midland shares are owned by company insiders. Comparatively, 2.8% of J. M. Smucker shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Archer Daniels Midland | 1 | 5 | 2 | 0 | 2.12 |
| J. M. Smucker | 0 | 7 | 10 | 0 | 2.59 |
Archer Daniels Midland currently has a consensus price target of $79.83, indicating a potential downside of 4.51%. J. M. Smucker has a consensus price target of $136.25, indicating a potential upside of 11.85%. Given J. M. Smucker’s stronger consensus rating and higher possible upside, analysts clearly believe J. M. Smucker is more favorable than Archer Daniels Midland.
Profitability
This table compares Archer Daniels Midland and J. M. Smucker’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Archer Daniels Midland | 2.16% | 9.21% | 3.95% |
| J. M. Smucker | 2.51% | 19.85% | 6.76% |
Earnings and Valuation
This table compares Archer Daniels Midland and J. M. Smucker”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Archer Daniels Midland | $80.27 billion | 0.50 | $1.08 billion | $3.65 | 22.90 |
| J. M. Smucker | $9.05 billion | 1.44 | -$138.70 million | $2.14 | 56.92 |
Archer Daniels Midland has higher revenue and earnings than J. M. Smucker. Archer Daniels Midland is trading at a lower price-to-earnings ratio than J. M. Smucker, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Archer Daniels Midland has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, J. M. Smucker has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500.
Summary
J. M. Smucker beats Archer Daniels Midland on 11 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 J. M. Smucker
The J. M. Smucker Company manufactures and markets branded food and beverage products worldwide. It operates in three segments: U.S. Retail Pet Foods, U.S. Retail Coffee, and U.S. Retail Consumer Foods. The company offers mainstream roast, ground, single serve, and premium coffee; peanut butter and specialty spreads; fruit spreads, toppings, and syrups; jelly products; nut mix products; shortening and oils; frozen sandwiches and snacks; pet food and pet snacks; and foodservice hot beverage, foodservice portion control, and flour products, as well as dog and cat food, frozen handheld products, juices and beverages, and baking mixes and ingredients. It provides its products under the Meow Mix, Milk-Bone, Pup-Peroni, Canine Carry Outs, Folgers, Café Bustelo, Dunkin', Folgers, Café Bustelo, 1850, Jif, Smucker's, Smucker's Uncrustables, Robin Hood, and Five Roses. The company sells its products through direct sales and brokers to food retailers, club stores, discount and dollar stores, online retailers, pet specialty stores, natural foods stores and distributors, drug stores, military commissaries, and mass merchandisers. Smucker Company was founded in 1897 and is headquartered in Orrville, Ohio.
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