Which is the better buy between Bunge Ltd and Archer Daniels Midland?

Bunge Ltd (NYSE:BG) and Archer-Daniels-Midland Company (NYSE:ADM) stock to watch for 2022. The looming food shortage in the world means that they will continue generating value for investors. Both are recommended for investment. If an investor wants exposure to only one of the two, this analysis shows which is the better buy.

Bunge Ltd. is trading at $114.72 with low activity. The EPS is $13.46, with the PE at 9.09. Bunge has a dividend yield of 2.18%. The ROE and ROA are at 25.42% and 7.26%, respectively.


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Looking at Archer-Daniels-Midland, the price is $88.93. The EPS is $5.45 with a PE of 16.28. The dividend yield is at 1.80%. The ROE and ROA are 13.8% and 5.28%, respectively. Archer-Daniels-Midland underperforms Bunge on all these measures.

The analysis above leads to the question of what firm offers better value to the investors. Certainly, that firm is Bunge Limited. The PE shows that the shares of Archer-Daniels-Midland are more expensively priced compared to Bunge. This is confirmed by the PEG ratios, which are at 1.33 for Bunge Ltd. and 2.20 for Archer-Daniels-Midland.

Returns on Bunge and Archer-Daniels-Midland are strongly correlated

Source – TradingView

The returns on the two stocks are strongly correlated. Bunge Ltd. appears to have returned about 2% less. We do not consider the difference significant. The trend channel shows that both stocks are on an upward momentum at the current prices. Investing in either of the stocks at the current prices is recommended. However, investors get more peace of mind if they buy Bunge Ltd.

Summary

Bunge Ltd is a better stock compared to Archer-Daniels-Midland. The company offers significantly greater book-to-market value. Market returns are similar for the two stocks.

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Source: https://invezz.com/news/2022/05/30/which-is-the-better-buy-between-bunge-ltd-and-archer-daniels-midland/