Cargill Stock Doesn’t Exist. Here’s Why.

Fact checked by Timothy LiReviewed by Thomas J. CatalanoFact checked by Timothy LiReviewed by Thomas J. Catalano

Cargill is one of America’s most successful companies. It’s also one of its most low profile. Unlike many of the nation’s biggest revenue generators, commodity trader Cargill has remained a private company. It’s heavily controlled by family members and prefers to stay out of the public eye, not even releasing full financial statements.

For years, people have wondered if there will ever be a way to invest in this great American success story that grew from a single grain mill into an international producer and distributor of agricultural products generating more than $160 billion in annual revenue. As things stand, the chance of Cargill giving up its privacy and issuing stock to the public looks unlikely. The Cargill family seems determined to continue their private tradition and has the resources to maintain that wish and survive and flourish in the shadows.

Key Takeaways

• Cargill is the biggest private company in the U.S. by revenue.
• It is largely owned by family members and has so far succeeded in averting pressure to go public.
• The company’s size, assets, ownership structure, and success mean it is likely to remain a private company for the foreseeable future.
• Investors can buy shares in Cargill’s rivals—Bunge Global and Archer-Daniels-Midland.

Tight Family Control

Since its founding by William W. Cargill in 1865, Cargill has remained a family business. Cargill had two children—a son, Austen, and a daughter, Edna, who married John MacMillan, one of her father’s business partners. The family has since expanded considerably.

In the early days, the company allowed the family to have total control of Cargill. Over time, it diversified away from family management. The year 1960 marked the first time a non-family member became the company’s president.

Ownership, however, has largely remained in the family. According to Forbes, family members own an estimated 88% of the company.

Pressure for an IPO Averted

Some of Cargill’s shareholders have pushed for an initial public offering (IPO) several times. However, because of its massive size and huge assets, Cargill has so far been able to avert the pressure to go public.

In 1993, it started an employee stock plan that allowed owners of stock to cash in on parts of their shares. This kept the pressure of an IPO at bay, with nearly 90% of the company remaining in the hands of the many family shareholders.

Another cry for an IPO came in the late 2000s. Cargill faced pressure from shareholders and charitable trusts that owned stock in the company. In 20211, the company decided to spin off its 64% ownership of The Mosaic Company—one of the largest fertilizer companies in the world. This move allowed shareholders to trade Cargill stock for Mosaic shares.

Massive Size and Success a Factor in Being Private

In 2023, Cargill generated revenue of $177 billion, making it by far the biggest private company in the U.S. by sales. It’s also one of the biggest companies in the world. Revenues of $177 billion would put it ahead of Ford as number 36 on the Fortune 500 list.

The past few years have been particularly lucrative for Cargill. Between 2020 and 2023, the company reported profits of about $18.5 billion, which, according to Bloomberg, is nearly as much as it reported in both the 1990s and 2000s combined. Strong financials and generous dividends suggest little need or desire to go public.

Generating cash and accessing capital isn’t an issue. Cargill has an A rating with both Standard & Poor’s (S&P) and Fitch, and an A2 rating from Moody’s. With these debt ratings, it can continue to raise money at low-interest rates without needing to seek capital through an equity offering.

Publicly-Traded Rivals

While you can’t invest in Cargill, you can invest in two of the company’s largest rivals on the open market. Bunge Global and the Archer Daniels Midland Company are publicly traded companies in the food processing and agricultural industries.

As of October 7, 2024, Bunge and Archer Daniels Midland have market capitalizations of $13.9 billion and $28.3 billion, respectively. In 2023, the former reported net sales of $59.5 billion, while the latter reported revenues of $93.9 billion.

The last few years have generally been good for agricultural commodities traders. A period of supply chain disruption and strong demand led prices of agricultural commodities to rocket. However, that favorable trading backdrop has been changing. Lately, supplies have been rising and prices have been falling, which is weighing on share prices.

Archer Daniels Midland has had a particularly rough time. Its stock price took a huge hit when word spread about an investigation into its accounting practices. The volatility of rival company share prices amid greater public scrutiny gives Cargill another reason not to want to go public.

$50-75 billion

Cargill’s hypothetical value based on the price-to-earnings multiples of its publicly listed rivals.

Can You Buy Shares in Cargill?

Cargill shares aren’t available to the general public. It is a private, family-owned business. The only exception is employees. Certain people who work for the company can buy ownership stakes through Cargill’s employee stock ownership plan.

Why Did Cargill Never Go Public?

Cargill hasn’t gone public presumably because it hasn’t needed to. Companies generally go public to raise funds and grow. Cargill has been able to do that successfully without giving up its family ownership and privacy.

Who Is the Largest Shareholder of Cargill?

Pauline MacMillan Keinath is rumored to be the biggest shareholder with a 13% stake. She is the great-granddaughter of W.W. Cargill, Cargill’s founder.

The Bottom Line

Most companies eventually go public so that they can continue to grow and fulfill their potential. Cargill has taken a different route and appears to be succeeding. The company likes to stay in the shadows and has the resources to continue that tradition. That’s great for the current owners wanting to keep the business in the family but sadly means the general public cannot buy shares in the company.

Read the original article on Investopedia.