Archer-Daniels-Midland (NYSE:ADM) and Mondelez International (NASDAQ:MDLZ) are both large-cap consumer staples companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.
Volatility and Risk
Archer-Daniels-Midland has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Mondelez International has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.
Profitability
This table compares Archer-Daniels-Midland and Mondelez International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Archer-Daniels-Midland | 2.53% | 11.10% | 4.70% |
Mondelez International | 11.99% | 13.92% | 5.72% |
Analyst Ratings
This is a breakdown of current ratings for Archer-Daniels-Midland and Mondelez International, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Archer-Daniels-Midland | 0 | 3 | 7 | 0 | 2.70 |
Mondelez International | 0 | 1 | 13 | 0 | 2.93 |
Archer-Daniels-Midland presently has a consensus price target of $54.50, indicating a potential downside of 8.33%. Mondelez International has a consensus price target of $64.2308, indicating a potential upside of 9.29%. Given Mondelez International's stronger consensus rating and higher probable upside, analysts plainly believe Mondelez International is more favorable than Archer-Daniels-Midland.
Institutional and Insider Ownership
77.9% of Archer-Daniels-Midland shares are held by institutional investors. Comparatively, 75.1% of Mondelez International shares are held by institutional investors. 1.3% of Archer-Daniels-Midland shares are held by company insiders. Comparatively, 1.3% of Mondelez International shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Dividends
Archer-Daniels-Midland pays an annual dividend of $1.48 per share and has a dividend yield of 2.5%. Mondelez International pays an annual dividend of $1.26 per share and has a dividend yield of 2.1%. Archer-Daniels-Midland pays out 45.7% of its earnings in the form of a dividend. Mondelez International pays out 51.0% 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 increased its dividend for 47 consecutive years and Mondelez International has increased its dividend for 8 consecutive years. Archer-Daniels-Midland is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Archer-Daniels-Midland and Mondelez International's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Archer-Daniels-Midland | $64.66 billion | 0.51 | $1.38 billion | $3.24 | 18.35 |
Mondelez International | $25.87 billion | 3.21 | $3.87 billion | $2.47 | 23.79 |
Mondelez International has lower revenue, but higher earnings than Archer-Daniels-Midland. Archer-Daniels-Midland is trading at a lower price-to-earnings ratio than Mondelez International, indicating that it is currently the more affordable of the two stocks.
Summary
Mondelez International beats Archer-Daniels-Midland on 10 of the 17 factors compared between the two stocks.