Archer Daniels Midland Company
) reached a new 52-week high of $43.96 on Friday, Dec 27 and
eventually closed trade at $43.76. The average volume of shares
traded over the last 3 months was over 4,604K. Notably, this
global food-processing and commodities-trading company amassed a
year-to-date return of approximately 56%.
Moreover, Archer Daniels currently trades at a forward P/E of
19.6x, a 15.3% premium to the industry average of 17.0x.
Additionally, the company's long-term estimated earnings per
share (EPS) growth rate of 8.7% is substantially higher than the
industry average of 6.8%.
We believe that the stock's strong price appreciation was
primarily driven by Archer Daniels' latest commitment of
returning $1.4 billion to shareholders in the form of dividend
payouts and share repurchases in 2014.
Archer Daniels recently declared an increase of its quarterly
dividend by 26% to 24 cents per share from its earlier payout of
19 cents. Apart from this, the company's board of directors has
decided to enhance shareholders' wealth through share
repurchases. This Zacks Rank #2 (Buy) company intends to buy back
18 million of its common shares by the end of 2014, which are
worth nearly $725 million at the current market price.
We believe that dividend payouts not only enhance
shareholders' value but stimulate a momentum in the company's
share price as well. Moreover, such a measure enables companies
to bolster investors' confidence, persuading them to either buy
or hold the scrip instead of selling it. Looking ahead, Archer
Daniels remains confident of its growth potential, raising hopes
for further enhancement of shareholders' returns through dividend
Furthermore, we expect Archer Daniels' consistent focus on
enhancing its processing capabilities and the expansion of its
global footprint through strategic acquisitions and joint
ventures to bode well for future growth. The company intends to
invest around $1.4 billion in capital projects in 2014, out of
which most will be outside the U.S. in high growth markets.
Apart from Archer Daniels, companies such as
The Walt Disney Company
V. F. Corp.
) achieved new 52-week highs of $74.78, $62.48 and $32.38,
respectively, on Dec 27, 2013.
ARCHER DANIELS (ADM): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
NEWELL RUBBERMD (NWL): Free Stock Analysis
V F CORP (VFC): Free Stock Analysis Report
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