ADM, Archer-daniels-midland Co
Archer-daniels-midland Co is an essential global agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- A consumer-brand business, where the durable asset is the brand and its hold on the shelf.
- What moves the needle
- Volume against price, and shelf position. What decides it: whether it can raise prices without losing the customer, and whether the brand still commands its margin.
- Is it a good business?
- Return on capital has sat near the cost of capital (median 8%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the 10-K is where you look.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $62.3B | $60.8B | $64.3B | $64.7B | $64.4B | $85.2B | $27.6B | $25.7B | $24.4B | $25.0B | $24.9B |
| Gross marginGross mgn | 6% | 6% | 6% | 6% | 7% | 7% | −240% | −236% | −227% | −201% | −203% |
| Operating marginOp. mgn | 3.4% | 3.2% | 3.8% | 3.1% | 3.4% | 4.2% | 20.3% | 19.3% | 12.2% | 7.5% | 7.6% |
| Net incomeNet inc. | $1.3B | $1.6B | $1.8B | $1.4B | $1.8B | $2.7B | $4.3B | $3.5B | $1.8B | $1.1B | $1.1B |
| EPS (diluted)EPS | $2.16 | $2.79 | $3.19 | $2.44 | $3.14 | $4.79 | $7.71 | $6.43 | $3.65 | $2.23 | $2.23 |
| Owner earningsOwner earn. | ($7.4B) | ($7.0B) | ($5.6B) | ($6.3B) | ($3.2B) | $5.4B | $2.2B | $3.0B | $1.2B | $4.2B | $4.8B |
| ROICROIC | 6% | 8% | 8% | 7% | 8% | 10% | 15% | 13% | 8% | 5% | 5% |
| Cash & investmentsCash+inv | $1.1B | $896M | $2.0B | $852M | $666M | $943M | $1.0B | $1.4B | $611M | $1.0B | $617M |
| Net debt / (cash)Net debt | $5.7B | $5.7B | $6.3B | $6.8B | $7.2B | $7.6B | $7.6B | $6.9B | $7.6B | $6.6B | $7.0B |
| Dividends / shareDiv/sh | $1.19 | $1.28 | $1.34 | $1.40 | $1.43 | $1.47 | $1.60 | $1.80 | $2.00 | $2.04 | — |
| Book value / shareBVPS | $29.07 | $32.03 | $33.50 | $34.03 | $35.44 | $39.77 | $43.19 | $44.55 | $44.99 | $46.98 | $47.13 |
Owner’s Scorecard
Will it survive?
- AdequateOperating income $1.9B ÷ interest expense $612M
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- HeavyTotal debt $7.6B ÷ operating income $1.9B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $6.6BMeaningful net debtCash $1.0B − debt $7.6B
Netting $1.0B of cash and short-term investments against $7.6B of debt leaves $6.6B owed, about 3.5× a year's operating profit, versus the gross figure above. It also holds $92M in longer-dated marketable securities; counting those, it sits at $6.5B of net debt. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Capital-hungryDSO 44 + DIO 50 − DPO 25 days
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below averageNOPAT $1.6B ÷ invested capital $29.3B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Cash machineOwner Earnings $4.2B = operating cash $5.5B − capex $1.2B
What an owner could take out without starving the business. That's 17% of revenue. Treating stock comp as the real expense it is (less $83M of SBC) leaves $4.1B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $5.5B ÷ net income $1.1B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Reinvests most of itDividends + buybacks $987M ÷ Owner Earnings $4.2B
Of $4.2B Owner Earnings, $987M (23%) went back to shareholders, $987M dividends, $0 buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.06×MaintainingCapex $1.2B ÷ depreciation $1.2B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 3% (FY2016) → 8% (FY2025)
Margins widened over the record, pricing power intact or improving.
- Reinvestment, incremental ROIC 14%
Reinvested capital earned only a modest return, growth is getting expensive.
- Worst year 2019 · 3.1% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −2.2%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio220:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$83M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 4% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
4 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $25.0B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.37×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt NearDebt ≤ working capital · $7.6B vs $7.1B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth PassEarnings +33% over the record · +36%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $2.23/share and book value $46.98/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Archer-daniels-midland Co has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $4.8B on 484M diluted shares; net debt $7.0B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Pricing power & competitionRisk Factors
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“In EMEA, results were driven by lower volumes and margins due to the competitive pricing environment and crop quality issues.”
From the recordOperating margin7.6% now (TTM), off a 20.3% peak (FY2022) - Concentrated dependenceBusiness
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“More than 95% of these intangibles are in the Nutrition segment which is not materially dependent upon any individual trademark, brand, recipe or other intellectual property.”
From the recordOwner-earnings margin at stake (TTM)19% - Debt terms & refinancingRisk Factors
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“The Company's credit facilities and certain debentures require the Company to comply with specified financial and non-financial covenants including maintenance of minimum tangible net worth as well as limitations related to incurring liens, secured debt, and certain other financing arrangements.”
From the recordBalance sheet (TTM)$6.6B meaningful net debt · interest covered 3.1× - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“AOT and Maize allege that members of the putative class collectively suffered damages calculated to be between approximately $ 500 million to over $ 2.0 billion as a result of the Company's alleged actions.”
A judgment, not a number, weigh it against the filing yourself. - Regulation & policyRisk Factors
Rules that can rewrite the economics, tariffs, antitrust, data, export controls.
“The process of preparing financial statements requires management to make estimates and judgments that affect the carrying values of the Company's assets and liabilities as well as the recognition of revenues and expenses.”
A judgment, not a number, weigh it against the filing yourself.
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “To test whether the Company's investment in Wilmar was other-than-temporarily impaired, our audit procedures included, among others, evaluating (i) the Company's intent and ability to hold the investment until recovery in market value, (ii) financial condition and near-term prospects of Wilmar, (iii…”
- “New Accounting Pronouncements Not Yet Adopted Effective January 1, 2026, the Company will be required to adopt ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expec…”
- “In response to the material weakness referred to above, under the oversight of the Audit Committee of the Company's Board of Directors, the Company implemented changes to its internal control over financial reporting, related to the Company's accounting practices and procedures for intersegment sale…”
- “Revaluation losses, including impairment, contingency and restructuring charges increased $472 million driven by $257 million of impairment charges related to market dynamics and the Company's updated investment strategy around startup and development stage companies, an impairment charge of $179 mi…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Packaged food
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| ADMArcher-daniels-midland Co | $25.0B | -201% | 7.5% | 5% | 17% |
| KHCKraft Heinz Co | $24.9B | 33% | -18.7% | -6% | 15% |
| GISGeneral Mills Inc | $19.5B | 35% | 17.0% | 11% | 12% |
| BGBunge Global SA | $16.9B | -295% | 10.2% | 4% | -5% |
| KDPKeurig Dr Pepper Inc. | $16.6B | 54% | 21.5% | 7% | 9% |
| HRLHormel Foods Corporation | $12.1B | 16% | 5.9% | 5% | 4% |
| HSYHershey Co | $11.7B | 34% | 12.3% | 11% | 16% |
| CAGConagra Brands, Inc. | $11.6B | 26% | 11.8% | 8% | 11% |