Archer Daniels Midland

Methodology

ADM's commodity processing earnings swing wildly with crop prices, weather, and global harvest conditions, making annual calculations unreliable. Using peak earnings during shortages severely overstates value while trough conditions understate potential. Normalize earnings across multiple crop cycles rather than using current spot results for meaningful estimates.

Methodology

ADM's PEG ratio fluctuates dramatically with agricultural cycles and misleads investors in commodity processors. Low ratios during peak earnings often signal cycle tops rather than bargains. For agricultural businesses, price-to-book or dividend yield provide more useful valuation frameworks than growth-based metrics that reflect temporary commodity swings.

Methodology

ADM's dividend provides meaningful total return especially during downturns when growth stalls. The commitment to maintaining dividends through agricultural volatility makes yield important for patient investors. PEGY better captures ADM's value-with-income appeal, though careful commodity cycle analysis remains essential.