How Safe Is Archer Daniels Midland's Dividend?

Archer Daniels Midland (NYSE: ADM), a global agricultural raw materials processor and logistics company, has paid 343 consecutive dividends spanning a period of 85 years. That impressive timeline includes bull markets and bear markets, as well as various challenging and advantageous circumstances. The company's amazing ability to generate cash flows supports its long history of creating shareholder value, which means shareholders should probably continue receiving a dividend each quarter.

However, global agriculture is rife with headwinds at the moment. American farmers are swimming in excess corn, while ethanol producers -- including Archer Daniels Midland, the world's largest -- have suffered from a glut of industrial alcohol in 2017. Meanwhile, South American harvests have continued their irregular timing due to droughts and farmer decisions to delay grain sales.

The company has already suffered from these headwinds. Operating cash flow dropped from $5.2 billion in 2013 to just $1.5 billion last year, a drop of 72%. Knowing that, investors may be right to wonder: How safe is Archer Daniels Midland's dividend?

Source: Fool.com