Updated on March 3rd, 2025 by Felix Martinez
At Sure Dividend, we believe that the best stocks to buy and hold to generate long-term wealth have several qualities in common. First, they are strong businesses that lead their respective industries, with the ability to generate consistent profits year after year—even during recessions.
Not only that, they also have shareholder-friendly management teams that are dedicated to raising their dividends each year. We advocate investing in the Dividend Aristocrats, a group of 69 companies in the S&P 500 Index, with at least 25 consecutive years of dividend increases.
You can download the full list of all 69 Dividend Aristocrats, along with several important financial metrics such as price-to-earnings ratios and dividend yields, by clicking on the link below:
Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.
Each year, we review all the Dividend Aristocrats. Next up is Archer Daniels Midland (ADM).
Archer Daniels Midland has increased its dividend each year for 52 years in a row and has paid uninterrupted quarterly dividends to shareholders for 90 years. The company’s dividend is also relatively safe thanks to sound business fundamentals.
Business Overview
Archer Daniels Midland was founded in 1902 when George A. Archer and John W. Daniels began a linseed-crushing business. In 1923, Archer-Daniels Linseed Company acquired Midland Linseed Products Company, which created Archer Daniels Midland.
Today, it is an agricultural industry giant with annual revenue above $86 billion. The company produces a wide range of products and services designed to meet the growing demand for food due to rising populations.
Archer-Daniels-Midland’s businesses include processing cereal grains, oilseeds, and agricultural storage and transportation. The Ag Services and Oilseeds segment is Archer Daniels Midland’s largest.
Source: Investor Presentation
Archer-Daniels-Midland reported its fourth-quarter Fiscal Year (FY) 2024 results on February 4th, 2025. The company reported full-year earnings per share (EPS) of $3.65 and adjusted EPS of $4.74, both lower than the previous year. Net earnings totaled $1.8 billion, while adjusted net earnings reached $2.3 billion. The company generated $2.8 billion in cash flow from operations. In response to market challenges, ADM announced cost-saving initiatives targeting $500–$750 million and increased its quarterly dividend by 2%.
Fourth-quarter earnings before income taxes were $667 million, down 9% year-over-year. GAAP EPS increased 10% to $1.17, while adjusted EPS declined 16% to $1.14. Full-year earnings before taxes fell 47% to $2.3 billion, and total segment operating profit dropped 28% to $4.2 billion. The Ag Services & Oilseeds segment saw a 40% decline in operating profit due to lower crush margins and biofuel policy uncertainties, while Carbohydrate Solutions remained stable. The Nutrition segment fell 10%, with Human Nutrition down 22%.
ADM expects 2025 adjusted EPS between $4.00 and $4.75, reflecting continued market pressures. The company prioritizes operational improvements, portfolio simplification, and strategic capital allocation to drive long-term growth.
Growth Prospects
ADM faced growth challenges in 2024 due to tough comparisons following a strong prior period. Performance varied across its segments.
The Ag Services & Oilseeds segment saw a 40% drop in operating profit for the full year, driven by lower crush margins and biofuel policy uncertainties.
Carbohydrate Solutions remained stable, showing resilience despite market pressures.
The Nutrition segment declined 10% for the full year, with Human Nutrition down 22%, reflecting weaker demand.
Over time, ADM has reshaped its portfolio with acquisitions, joint ventures, and strategic divestitures.
Source: Investor Presentation
For example, the acquisition of Ziegler Group and the establishment of a nutrition flavor research and customer center are expected to improve growth prospects.
This positive outlook leads us to anticipate a feasible growth rate of approximately 3.0% for the next five years.
Competitive Advantages & Recession Performance
Archer Daniels Midland has built significant competitive advantages over the years. It is the largest processor of corn in the world, which leads to economies of scale and efficiencies in production and distribution.
It is an industry giant with ~440 crop procurement locations, ~300 food and feed processing facilities, and 64 innovation centers.
At its innovation centers, the company conducts research and development to respond more effectively to changes in customer demand and improve processing efficiency. Archer Daniels Midland’s unparalleled global transportation network serves as a huge competitive advantage.
The company’s global distribution system provides high margins and barriers to entry, allowing Archer Daniels Midland to remain highly profitable even during industry downturns.
Profits held up, even during the Great Recession. Earnings-per-share during the Great Recession are below:
- 2007 earnings-per-share of $2.38
- 2008 earnings-per-share of $2.84 (19% increase)
- 2009 earnings-per-share of $3.06 (7.7% increase)
- 2010 earnings-per-share of $3.06
Archer Daniels Midland’s earnings-per-share increased in 2008 and 2009, during the Great Recession. Very few companies can boast such a performance in one of the worst economic downturns in U.S. history.
Archer Daniels Midland’s remarkable durability in recessions could be due to the fact that grains still need to be processed and transported, regardless of the economic climate.
There will always be a certain level of demand for Archer Daniels Midland’s products. From a dividend perspective, the payout looks quite safe.
Valuation & Expected Returns
Based on the expected 2025 EPS of $4.21, ADM shares trade for a price-to-earnings ratio of 11.2. Archer–Daniels–Midland has been valued at a price-to-earnings multiple of ~15 over the last decade.
Our fair value P/E is 14, meaning the stock is undervalued.
An increasing valuation multiple could generate 6% annual returns for shareholders over the next five years. Future returns will also be derived from earnings growth and dividends.
We expect Archer Daniels Midland to grow its future earnings by ~3% per year through 2030, and the stock has a current dividend yield of 4.3%.
In this case, total expected returns are 13.3% per year over the next five years, a solid risk-adjusted rate of return for Archer Daniels Midland stock.
Final Thoughts
Archer Daniels Midland is coming off a few years of strong earnings growth. While earnings are expected to decline in 2024, we see the potential for a return to long-term growth.
The company has a long history of navigating challenging periods. It has continued to generate profits and reward shareholders with rising dividends.
The stock appears to be undervalued, and has a 4.3% dividend yield, plus annual dividend increases. As a result, Archer Daniels Midland seems to be a buy for dividend growth investors.
If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 54 stocks with 50+ years of consecutive dividend increases.
- The Dividend Achievers List: a group of stocks with 10+ years of consecutive dividend increases.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500. - The Monthly Dividend Stocks List: contains stocks that pay dividends each month, for 12 payments per year.
- The 20 Highest Yielding Monthly Dividend Stocks
- The High Dividend Stocks List: high dividend stocks are suited for investors that need income now (as opposed to growth later) by listing stocks with 5%+ dividend yields.
The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them monthly: