Cargill is ranked by Forbes as Americas #1 privately-owned companies, with revenues of $113.5 billion! Cargill is a behemoth! With impressive revenue records year over year, investors are eager to get a piece of this companies stock price. But you can't; here's why Cargill stock doesn't exist. YET!
Is Cargill on the Stock Exchange?
- Can you buy Cargill stock? That is the question. Cargill is not on the stock exchange, however. That's unfortunate as it's one of the largest privately owned company in the world. In fact, read more to learn why Cargill wants to remain a private company and why you can't buy Cargill stock.
1. The Birth of Cargill
At the end of the American Civil War, Cargill was founded by William Wallace Cargill in 1865. The company has grown immensely from its humble beginnings as a grain storage facility.
They are now one of the world's top producers and distributors of agricultural products, not to mention sugar, refined oil, chocolate and turkey.
And of course, Cargill also provides risk management, commodities trading and transportation services. Just not Cargill stock. However, if you want to learn more about stock trading, click here.
2. Overview: Cargill Stock
Headquartered in Minnetonka, Minnesota, Cargill employs more than 160,000 people in more than 125 different countries.
For those number junkies out there, here's a little known fact. For the past 28 years, Cargill has consistently ranked among the top of Forbes' list of private companies for the past 28 years.
That'd probably make for a great Cargill stock investment. But we're out of luck. Instead, if you want trading ideas, check out our stock alerts.
3. The Cargill Purpose
With a purpose to "nourish the world in a safe, responsible and sustainable way", Cargill has their hands full as this is no small feat.
To do so, they combine experience with innovations in technology to serve their consumers across the globe.
Cargill specializes in what it does best, large-scale commodity trading, storage, transport, and wholesale manufacturing of food and agricultural products.
4. Global Reach: Cargill Stock
Cargill, which may be the largest corporation in the world, presently owns major shares of at least the following three corporations: NatureWorks, the Wilbur Chocolate Company, and the Mosaic Company.
Mosaic is a major fertilizer producer, set up as a publicly-traded venture of some Macmillan family members. NatureWorks makes bio-plastics, and Wilbur obviously makes chocolate.
5. The Cargill Reach
In total, Cargill has four different diverse business divisions:
- Agriculture: Cargill connects agricultural commodities like grains and oilseeds with users through processing, marketing, and distribution. Furthermore, they also link crop and livestock producers with farm services and products.
- Animal Nutrition and Protein: The company serves as an intermediary between suppliers and produces in a range of animal food services - think dairy, pork, and pet food, along with meat and poultry products.
- Food: From the farm to the plate, this area provides food manufacturers, foodservice companies, and retailers food and beverage ingredients and services.
- Financial and Industrial: Cargill appears to cover all basis, and one of the huge components in production is risk and capital. Along with commodities, Cargill also provides its customers with financial solutions and risk management services.
How Do I Invest in Cargill?
- You can't invest in Cargill unfortunately. As it's one of the largest privately owned companies there's no Cargill stock. However, they do have some competitors you can invest in; Bunge Limited ($BG) and Archer Daniels Midland Company ($ADM). Check those two out as a replacement for Cargill stock.
1. Tight Cargill Family Control
Since its 1865 founding by William W. Cargill, the company's remained a private, family-owned business. And to date, more than 100 family members own about 90% of Cargill shares for over 140 years.
In the early years, the family was allowed to have total control of Cargill. However, over time, it evolved away from the family management approach.
It took close to 100 years before they let the reigns go and appointed a non family member as the chief executive officer (CEO).
As it stands now, the 17-member board of directors only has six family members. Likewise, the other 11 board members come from outside personnel.
2. Pressure for an IPO Averted
It comes as no surprise, Cargill stockholders have pushed for an IPO (initial public offering) over the years. But much to shareholders chagrin, Cargill was able to avert the pressure to go public.
Most likely, due to their massive size and huge assets. It all started back in 1993 with an employee stock plan. This plan enabled owners of Cargill stock to cash in on parts of their shares.
By the same token, this kept the pressure of an IPO at bay. In light of this, close to 90% of the company remained in the hands of the family shareholders.
Yet little did they know, that would not be enough. It only took seven years for another cry for an IPO. This time, pressure came from shareholders and charitable trusts that owned stock in the company.
On paper, the shares were worth a pretty penny, but they weren't liquid. To solve the illiquidity problem, Cargill decided to spin off its 64% ownership in The Mosaic Company.
For those of you who don't know, The Mosaic Company is one of the largest fertilizer companies in the world. In doing so, shareholders were able to trade Cargill stock for Mosaic shares.
There is no doubt this was a good move as it also allowed Cargill to pay down more debt.
3. Interesting Facts About Cargill
- Cargill is the largest private company in the United States.
- Net revenue in 2019 was $113.5 billion.
- The company has four primary operating divisions,
- Cargill's top five companies are Cargill Cotton, Cargill Ocean Transportation, Cargill Cocoa & Chocolate, Diamond Crystal Salt, and Truvia.
- They managed to avoid going public because of its size and the number of assets it holds.
- Because of their focus on paying down its debt, they've earned an A-rating with Standard & Poor's (S&P) and Fitch, and an A2 rating from Moody's.
4. Massive Size a Massive Factor in Being Private With No Cargill Stock
For the last 35 years, Forbes magazine has published its annual list of the largest private companies in America. In all but two of those years, Cargill has claimed the top spot in all but two years.
With a total of $113.5 billion in revenue in 2019, they ranked number one on Forbes' list. All things considered, this puts Cargill in the top 15 on the Fortune 500 list of highest revenue-producing companies.
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5. They Don't Need Our Money
Because of their impressive size, revenues and low debt, Cargill has been able to maintain a superior credit rating. To put this in perspective, their debt shrunk from $12.3 billion in 2015 to $9.6 billion in 2019.
This matters, because with a good credit rating, they have easy access to money at low-interest rates. In simple terms, this means they don't need to raise money through an equity offering.
Is Cargill a Publicly Traded Company?
- Is Cargill a publicly traded company? No, they're not. Which results in having no Cargill stock to trade. However, you can check out their competitors who are publicly traded companies.
1. The Downside for (Shareholders) Not Accessing the Stock Market for Capital
One of the costs of not accessing stock markets for capital is that shareholders may not be able to capitalize on their assets. Because of this, firms often use stock sales not to raise capital but to compensate their shareholders who want to cash out.
2. Alternatives to Buying Cargill Stock
Since you can't join them, you can't always try to beat them at their own game. Why don't you purchase shares in their rival companies, Bunge Limited and Archer-Daniels-Midland?
Both Bunge Limited and Archer Daniels Midland are both publicly traded companies in the food processing and agricultural industries. And their numbers look good!
Take Bunge, for example; last year, they made $41.1 billion in revenues and had a market capitalization of $4.8 billion. Likewise, Archer-Daniels-Midland realized revenues of $64.7 million and a and a market capitalization of $18.2 billion.
Cargill has managed to prevent their heirs from voting to capitalize their shares in public markets as well as from being involved in managing the firm at all. This is an impressive feat, to say the least. And one of the reasons why Cargill stock doesn't exist.
It does, however, remain to be seen what happens with the next generation of heirs to their fortune. All of this assuming the Koch brothers don't manage to lose their fortune themselves due to their high profile political involvement. Something which historically proves to be the demise of many business people, because politics, like war, demands endless money.
In the meantime, you have lots of other options to buy stocks in their competitors. Take our free online trading courses to make sure you're trading stocks the best way possible.