Here's How Much a $1000 Investment in Archer Daniels Midland Made 10 Years Ago Would Be Worth Today

2022-05-28 05:42:28 By : Ms. Estella Fu

How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in Archer Daniels Midland (ADM) ten years ago? It may not have been easy to hold on to ADM for all that time, but if you did, how much would your investment be worth today?

Archer Daniels Midland's Business In-Depth

With that in mind, let's take a look at Archer Daniels Midland's main business drivers.

Incorporated in Delaware in 1923, Archer Daniels Midland Company is successor to the Daniels Linseed Co. Founded in 1902, this Illinois-based company is one of the leading producers of food and beverage ingredients as well as goods made from various agricultural products. The company processes oilseeds, corn, wheat, cocoa and other feedstuffs. Moreover, it engages in the manufacturing, sale, and distribution of products like natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products as well as other specialty food and feed ingredients. Archer Daniels also has a worldwide grain elevator and transportation network for procurement, storage, cleansing and transportation of agricultural commodities. Archer Daniels also makes important investments in joint ventures to aid growth. Starting first-quarter 2018, the company realigned its business segments to reflect a new operating structure. It currently reports through the Carbohydrate Solutions, Nutrition, Oilseeds and Origination segments. On May 29, 2019, Archer Daniels created a new business unit, namely, Ag Services & Oilseeds. The unit combined the company’s Origination and Oilseed operations in a single reporting structure which came into operations from Jul 1, 2019. The Ag Services & Oilseeds (78.6% of 2021 total revenues) includes the Agricultural Services business, excluding Milling and engages in originating, merchandising, crushing and processing oilseeds. The Carbohydrate Solutions segment (13%) comprises the Corn and Milling operations. Nutrition segment (7.9%) includes Animal Nutrition and Bioactives businesses as well as the Wild Flavors & Specialty Ingredients segment (WFSI). The Other segment (0.4%) primarily includes the company’s financial business units. However, it makes negligible contribution to the company’s revenues.

Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Archer Daniels Midland, if you bought shares a decade ago, you're likely feeling really good about your investment today.

According to our calculations, a $1000 investment made in April 2012 would be worth $3,021.88, or a 202.19% gain, as of April 28, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.

Compare this to the S&P 500's rally of 198.14% and gold's return of 9.05% over the same time frame.

Going forward, analysts are expecting more upside for ADM.

Shares of Archer Daniels have outpaced the industry in a year's time on robust earnings surprise trend, which continued in first-quarter 2022. Both top and bottom lines beat estimates and grew year over year. This marked the 11th straight quarter of an earnings surprise and the 10th straight quarter of adjusted operating profit growth. Results gained from solid demand, improved productivity and product innovations. Persistent growth in the Nutrition segment, driven by significant gains in the Human and Animal Nutrition units, remained key growth drivers. Management expects the nutrition segment operating profit growth of 20% in 2022. However, dismal margins and rising SG&A costs are deterrents. Higher inflation and issues related to the short crop in South America, stemming from the conflict in Ukraine, remain concerning.

The stock has jumped 5.17% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2022; the consensus estimate has moved up as well. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report   Archer Daniels Midland Company (ADM) : Free Stock Analysis Report   To read this article on Zacks.com click here.   Zacks Investment Research

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