20 Worst Dividend Aristocrat Stocks According to Analysts

9. Archer-Daniels-Midland Company (NYSE:ADM)

Average Analyst Rating Score: 3.6

Archer-Daniels-Midland Company (NYSE:ADM) is an Illinois-based food processing company. It ranks ninth on our list of the worst dividend aristocrat stocks. On May 1, the company declared a quarterly dividend of $0.50 per share, which fell in line with its previous dividend. It is a Dividend King with a dividend growth streak over 51 years. The stock’s dividend yield on June 14 came in at 3.36%.

Analysts presented a bearish stance on Archer-Daniels-Midland Company (NYSE:ADM) as the company is affected by commodity prices as a gain processor and trader. Increased supply has led to falling prices, negatively impacting the company’s results. In the first quarter of 2024, it reported a revenue of $21.8 billion, which showed a 9.24% decline from the same period last year. The company had a rough start to 2024 when it appointed a new interim CFO amidst an ongoing accounting investigation. It also disclosed the pending investigation by external legal counsel regarding specific accounting practices and procedures with ADM’s Nutrition segment. After this event, the market lost confidence in the company and the stock declined by 29% on January 22. Seth Goldstein, analyst at Morningstar Investment Service, made the following comment on this news:

“This week’s news damages ADM’s growth strategy, it damages their credibility and their plan to shift away from just creating merchandising and crop trading into this more stable, higher profit nutrition business.”

In the first quarter of 2024, Archer-Daniels-Midland Company (NYSE:ADM) reported a 39% decline in its Nutrition segment revenue to $84 million. The stock is down by over 18% year-to-date. Diamond Hill Capital also highlighted the current environment for ADM in its first quarter 2024 investor letter:

“Other bottom contributors in Q1 included Archer-Daniels-Midland Company (NYSE:ADM). Shares of agricultural commodities and products company ADM sold off materially following the announcement its CFO had been put on administrative leave due to inter-segment financial reporting issues (particularly related to the nutrition segment) and the SEC had an open investigation into the matter. ADM has since published its fiscal year 2023 10-K, which included restatements of inter-segment operating profits from 2018-2023. Since this was an inter-segment issue, the consolidated financials did not need to be restated. While we are watching further developments, we remain comfortable with the business valuation at the current level.”

According to Insider Monkey’s database, 40 hedge funds owned stakes in Archer-Daniels-Midland Company (NYSE:ADM) in Q1 2024, up from 34 in the preceding quarter. These stakes are valued at over $966.3 million.