On February 3, the agro titan Archer-Daniels-Midland Company (NYSE:ADM) came up with mixed results for 4Q14 with earnings beating the Zacks Consensus Estimate by a wide margin but revenues falling short.
This provider of agricultural products has announced a 17% hike in its quarterly cash dividend to $0.28 a share, which probably soothed investors’ nerves and pushed up its shares in the key trading session following the earnings release. Its shares, however, shed gains after hours.
4Q Earnings in Focus
The company’s adjusted earnings for the fourth quarter of 2014 rose 5.3% year over year to $1.00 per share and surpassed the Zacks Consensus Estimate of $0.93. Further, including certain one-time items, Archer Daniels reported earnings of $1.08 per share compared with $0.56 in the year-ago quarter. However, the company’s total revenue was down 13.5% year over year. Total revenue of $20.9 billion lagged the Zacks Consensus Estimate of $23.3 billion.
The company scored on shareholders’ value maximization, returning over $1.8 billion to shareholders in 2014 in the form of share repurchases and dividend payments. In the fourth quarter, Archer Daniels bought back about 9.4 million shares. Apart from the said dividend hike, Archer Daniels also plans to buy back shares worth $1.5–$2 billion in 2015. The company also estimates $1.1–$1.3 billion capital expenditure for this year.
ETF Impact
The mixed performance of this agro giant has got it a 1.22% stock gain in the key trading session on February 3 but took away 0.96% after hours. Also, the Q4 result has put various agricultural ETFs in focus for the coming days. Below, we have highlighted three agricultural ETFs that are heavily invested in this agro giant and have been up about 1% in the key trading session.
MSCI Global Agri. Producers Fund (NYSE:VEGI)
This global ETF looks to track the MSCI ACWI Select Agriculture Producers Investable Market Index and invests about $40.1 million of assets. In its 132-stock portfolio, the in-focus Archer Daniels Midland takes the second spot with 7.89% allocation.
Sector wise, materials take the top position with 51.45% share followed by food and beverages (19.86%). Country wise, the U.S. accounts for about half of the portfolio while Canada (12.02%) and Switzerland (7.73%) occupy the next positions (read: Agribusiness ETFs in Focus on Monsanto's Mixed Q1 Earnings).
The ETF charges about 39 bps in fees a year and has a dividend yield of 2.03%. The fund has tacked in about 1.5% so far this year (as of February 3, 2015).
PowerShares Global Agriculture (NASDAQ:PAGG)
This product provides global exposure to companies engaged in agriculture and farming-related activities. It follows the Nasdaq OMX Global Agriculture Index and has $52.8.4 million in AUM. PAGG charges 76 bps in fees per year.
Holding 42 securities, the fund invests 7.3% in Archer-Daniels-Midland. The U.S. firms dominate the fund’s return with more than 40% of assets, followed by Canada (13%) and Malaysia (7.89%). The ETF has added 3.2% in the year-to-date time frame.
MarketVectors-Agribusiness (NYSE:MOO)
This fund provides exposure to the global agribusiness industry by tracking the Market Vectors Global Agribusiness Index. It is a pretty popular choice in the space with AUM of over $1.45 billion. The ETF charges 55 bps in annual fees.
In total, the fund holds 58 securities in its basket. Of these firms, the stock under consideration – Archer-Daniels – takes the fifth place, making up roughly 6.01% of the total assets. In terms of country allocation, the U.S. (50%), Canada (10.4%) and Switzerland (8.1%) occupy the top spots. The fund has added about 3.2% so far this year.