ALCOA CORP (AA) Stock Fundamental Analysis
NYSE:AA - New York Stock Exchange, Inc. - US0138721065 - Common Stock - Currency: USD
Taking everything into account, AA scores 4 out of 10 in our fundamental rating. AA was compared to 152 industry peers in the Metals & Mining industry. There are concerns on the financial health of AA while its profitability can be described as average. A decent growth rate in combination with a cheap valuation! Better keep an eye on AA.
1. Profitability
1.1 Basic Checks
AA had positive earnings in the past year.
In the past year AA had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: AA reported negative net income in multiple years.
AA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AA has a better Return On Assets (5.90%) than 77.63% of its industry peers.
AA has a Return On Equity of 14.79%. This is amongst the best in the industry. AA outperforms 86.84% of its industry peers.
The Return On Invested Capital of AA (11.05%) is better than 89.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 14.79% | ||
| ROIC | 11.05% |
ROA(3y)-1.67%
ROA(5y)-0.66%
ROE(3y)-5.52%
ROE(5y)-2.51%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
AA has a better Profit Margin (6.79%) than 75.66% of its industry peers.
AA's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 12.74%, AA is doing good in the industry, outperforming 67.76% of the companies in the same industry.
AA's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 20.43%, AA is in line with its industry, outperforming 59.21% of the companies in the same industry.
AA's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.74% | ||
| PM (TTM) | 6.79% | ||
| GM | 20.43% |
OM growth 3Y-24.44%
OM growth 5Y-2.57%
PM growth 3Y-47.72%
PM growth 5YN/A
GM growth 3Y-14.25%
GM growth 5Y-3.06%
2. Health
2.1 Basic Checks
AA has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
AA has more shares outstanding than it did 1 year ago.
AA has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, AA has a worse debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.75, we must say that AA is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.75, AA is in line with its industry, outperforming 40.79% of the companies in the same industry.
AA has a debt to FCF ratio of 7.61. This is a slightly negative value and a sign of low solvency as AA would need 7.61 years to pay back of all of its debts.
The Debt to FCF ratio of AA (7.61) is better than 64.47% of its industry peers.
AA has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
AA's Debt to Equity ratio of 0.44 is on the low side compared to the rest of the industry. AA is outperformed by 73.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 7.61 | ||
| Altman-Z | 1.75 |
ROIC/WACC1.11
WACC9.96%
2.3 Liquidity
A Current Ratio of 1.71 indicates that AA should not have too much problems paying its short term obligations.
AA has a Current ratio of 1.71. This is in the lower half of the industry: AA underperforms 63.16% of its industry peers.
A Quick Ratio of 1.00 indicates that AA may have some problems paying its short term obligations.
With a Quick ratio value of 1.00, AA is not doing good in the industry: 67.76% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 237.06% over the past year.
Measured over the past years, AA shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -48.01% on average per year.
AA shows a strong growth in Revenue. In the last year, the Revenue has grown by 20.85%.
Measured over the past years, AA shows a small growth in Revenue. The Revenue has been growing by 2.66% on average per year.
EPS 1Y (TTM)237.06%
EPS 3Y-48.01%
EPS 5YN/A
EPS Q2Q%365.43%
Revenue 1Y (TTM)20.85%
Revenue growth 3Y-0.71%
Revenue growth 5Y2.66%
Sales Q2Q%29.63%
3.2 Future
Based on estimates for the next years, AA will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.80% on average per year.
The Revenue is expected to decrease by -0.91% on average over the next years.
EPS Next Y287.8%
EPS Next 2Y78.67%
EPS Next 3Y58.47%
EPS Next 5Y19.8%
Revenue Next Year10.69%
Revenue Next 2Y3.55%
Revenue Next 3Y4.32%
Revenue Next 5Y-0.91%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 5.95 indicates a rather cheap valuation of AA.
Compared to the rest of the industry, the Price/Earnings ratio of AA indicates a rather cheap valuation: AA is cheaper than 99.34% of the companies listed in the same industry.
AA is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 7.61 indicates a rather cheap valuation of AA.
Compared to the rest of the industry, the Price/Forward Earnings ratio of AA indicates a rather cheap valuation: AA is cheaper than 95.39% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.32. AA is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.95 | ||
| Fwd PE | 7.61 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AA indicates a rather cheap valuation: AA is cheaper than 96.05% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, AA is valued cheaper than 80.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.35 | ||
| EV/EBITDA | 3.34 |
4.3 Compensation for Growth
AA's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as AA's earnings are expected to grow with 58.47% in the coming years.
PEG (NY)0.02
PEG (5Y)N/A
EPS Next 2Y78.67%
EPS Next 3Y58.47%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.72%, AA has a reasonable but not impressive dividend return.
The stock price of AA dropped by -41.01% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
AA's Dividend Yield is a higher than the industry average which is at 2.99.
AA's Dividend Yield is slightly below the S&P500 average, which is at 2.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
5.2 History
AA has been paying a dividend for at least 10 years, so it has a reliable track record.
AA has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years3
5.3 Sustainability
AA pays out 11.28% of its income as dividend. This is a sustainable payout ratio.
DP11.28%
EPS Next 2Y78.67%
EPS Next 3Y58.47%
23.32
-1.75 (-6.98%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners77.41%
Inst Owner Change-0.08%
Ins Owners0.77%
Ins Owner Change1.06%
Market Cap6.04B
Analysts81.9
Price Target49.07 (110.42%)
Short Float %4.45%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.72% |
Yearly Dividend0.41
Dividend Growth(5Y)N/A
DP11.28%
Div Incr Years0
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)12.48%
Min EPS beat(2)3.63%
Max EPS beat(2)21.34%
EPS beat(4)4
Avg EPS beat(4)48.15%
Min EPS beat(4)3.63%
Max EPS beat(4)96.74%
EPS beat(8)6
Avg EPS beat(8)27%
EPS beat(12)8
Avg EPS beat(12)-10.45%
EPS beat(16)12
Avg EPS beat(16)-5.01%
Revenue beat(2)1
Avg Revenue beat(2)-3.01%
Min Revenue beat(2)-7.39%
Max Revenue beat(2)1.37%
Revenue beat(4)1
Avg Revenue beat(4)-2.95%
Min Revenue beat(4)-7.39%
Max Revenue beat(4)1.37%
Revenue beat(8)1
Avg Revenue beat(8)-2.75%
Revenue beat(12)2
Avg Revenue beat(12)-2.78%
Revenue beat(16)4
Avg Revenue beat(16)-2.29%
PT rev (1m)-2.24%
PT rev (3m)-1.84%
EPS NQ rev (1m)10.16%
EPS NQ rev (3m)71.6%
EPS NY rev (1m)-10.41%
EPS NY rev (3m)-1.39%
Revenue NQ rev (1m)0.58%
Revenue NQ rev (3m)21.79%
Revenue NY rev (1m)-2.68%
Revenue NY rev (3m)0.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.95 | ||
| Fwd PE | 7.61 | ||
| P/S | 0.48 | ||
| P/FCF | 17.35 | ||
| P/OCF | 6.56 | ||
| P/B | 1.04 | ||
| P/tB | 1.04 | ||
| EV/EBITDA | 3.34 |
EPS(TTM)3.92
EY16.81%
EPS(NY)3.06
Fwd EY13.14%
FCF(TTM)1.34
FCFY5.76%
OCF(TTM)3.55
OCFY15.24%
SpS48.92
BVpS22.46
TBVpS22.46
PEG (NY)0.02
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 14.79% | ||
| ROCE | 13.99% | ||
| ROIC | 11.05% | ||
| ROICexc | 12.34% | ||
| ROICexgc | 12.34% | ||
| OM | 12.74% | ||
| PM (TTM) | 6.79% | ||
| GM | 20.43% | ||
| FCFM | 2.75% |
ROA(3y)-1.67%
ROA(5y)-0.66%
ROE(3y)-5.52%
ROE(5y)-2.51%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-23.91%
ROICexcg growth 5Y3.19%
ROICexc growth 3Y-23.93%
ROICexc growth 5Y3.18%
OM growth 3Y-24.44%
OM growth 5Y-2.57%
PM growth 3Y-47.72%
PM growth 5YN/A
GM growth 3Y-14.25%
GM growth 5Y-3.06%
F-Score7
Asset Turnover0.87
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 7.61 | ||
| Debt/EBITDA | 1.15 | ||
| Cap/Depr | 90.94% | ||
| Cap/Sales | 4.52% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 41.02% | ||
| Profit Quality | 40.47% | ||
| Current Ratio | 1.71 | ||
| Quick Ratio | 1 | ||
| Altman-Z | 1.75 |
F-Score7
WACC9.96%
ROIC/WACC1.11
Cap/Depr(3y)84.05%
Cap/Depr(5y)72.99%
Cap/Sales(3y)4.59%
Cap/Sales(5y)4.15%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)237.06%
EPS 3Y-48.01%
EPS 5YN/A
EPS Q2Q%365.43%
EPS Next Y287.8%
EPS Next 2Y78.67%
EPS Next 3Y58.47%
EPS Next 5Y19.8%
Revenue 1Y (TTM)20.85%
Revenue growth 3Y-0.71%
Revenue growth 5Y2.66%
Sales Q2Q%29.63%
Revenue Next Year10.69%
Revenue Next 2Y3.55%
Revenue Next 3Y4.32%
Revenue Next 5Y-0.91%
EBIT growth 1Y758.78%
EBIT growth 3Y-24.98%
EBIT growth 5Y0.02%
EBIT Next Year155.7%
EBIT Next 3Y35.74%
EBIT Next 5Y10.1%
FCF growth 1Y155.88%
FCF growth 3Y-57.05%
FCF growth 5Y-32.82%
OCF growth 1Y47.2%
OCF growth 3Y-12.23%
OCF growth 5Y-1.94%