ALCOA CORP (AA) Stock Fundamental Analysis
NYSE:AA - New York Stock Exchange, Inc. - US0138721065 - Common Stock - Currency: USD
Overall AA gets a fundamental rating of 5 out of 10. We evaluated AA against 154 industry peers in the Metals & Mining industry. While AA is still in line with the averages on profitability rating, there are concerns on its financial health. AA scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
AA had positive earnings in the past year.
AA had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: AA reported negative net income in multiple years.
Each year in the past 5 years AA had a positive operating cash flow.
1.2 Ratios
The Return On Assets of AA (5.90%) is better than 79.22% of its industry peers.
The Return On Equity of AA (14.79%) is better than 87.01% of its industry peers.
AA has a better Return On Invested Capital (11.01%) than 87.66% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 14.79% | ||
| ROIC | 11.01% |
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
With a decent Profit Margin value of 6.79%, AA is doing good in the industry, outperforming 74.03% of the companies in the same industry.
AA's Profit Margin has declined in the last couple of years.
AA has a Operating Margin of 12.74%. This is in the better half of the industry: AA outperforms 68.18% of its industry peers.
In the last couple of years the Operating Margin of AA has declined.
AA's Gross Margin of 20.43% is in line compared to the rest of the industry. AA outperforms 58.44% of its industry peers.
In the last couple of years the Gross Margin of AA has declined.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AA is still creating some value.
Compared to 1 year ago, AA has more shares outstanding
The number of shares outstanding for AA has been increased compared to 5 years ago.
Compared to 1 year ago, AA has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 1.86 indicates that AA is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 1.86, AA is doing worse than 63.64% of the companies in the same industry.
The Debt to FCF ratio of AA is 7.74, which is on the high side as it means it would take AA, 7.74 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.74, AA is in the better half of the industry, outperforming 65.58% of the companies in the same industry.
A Debt/Equity ratio of 0.45 indicates that AA is not too dependend on debt financing.
AA's Debt to Equity ratio of 0.45 is on the low side compared to the rest of the industry. AA is outperformed by 74.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 7.74 | ||
| Altman-Z | 1.86 |
ROIC/WACC1.13
WACC9.75%
2.3 Liquidity
A Current Ratio of 1.71 indicates that AA should not have too much problems paying its short term obligations.
With a Current ratio value of 1.71, AA is not doing good in the industry: 64.94% of the companies in the same industry are doing better.
AA has a Quick Ratio of 1.71. This is a bad value and indicates that AA is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.00, AA is doing worse than 66.88% of the companies in the same industry.
| 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 276.60% over the past year.
AA shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -48.01% yearly.
Looking at the last year, AA shows a quite strong growth in Revenue. The Revenue has grown by 12.74% in the last year.
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)276.6%
EPS 3Y-48.01%
EPS 5YN/A
EPS Q2Q%143.75%
Revenue 1Y (TTM)12.74%
Revenue growth 3Y-0.71%
Revenue growth 5Y2.66%
Sales Q2Q%3.85%
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 19.06% on average per year.
Based on estimates for the next years, AA will show a decrease in Revenue. The Revenue will decrease by -0.91% on average per year.
EPS Next Y269.47%
EPS Next 2Y74.99%
EPS Next 3Y55.41%
EPS Next 5Y19.06%
Revenue Next Year6.54%
Revenue Next 2Y2.63%
Revenue Next 3Y3.31%
Revenue Next 5Y-0.91%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 7.31, the valuation of AA can be described as very cheap.
AA's Price/Earnings ratio is rather cheap when compared to the industry. AA is cheaper than 99.35% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.50, AA is valued rather cheaply.
The Price/Forward Earnings ratio is 10.32, which indicates a very decent valuation of AA.
79.87% of the companies in the same industry are more expensive than AA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.44, AA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.31 | ||
| Fwd PE | 10.32 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AA is valued cheaper than 94.16% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of AA indicates a somewhat cheap valuation: AA is cheaper than 78.57% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.56 | ||
| EV/EBITDA | 4.04 |
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 55.41% in the coming years.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y74.99%
EPS Next 3Y55.41%
5. Dividend
5.1 Amount
AA has a Yearly Dividend Yield of 1.40%.
AA's Dividend Yield is a higher than the industry average which is at 2.90.
With a Dividend Yield of 1.40, AA pays less dividend than the S&P500 average, which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
AA has paid a dividend for at least 10 years, which is 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 2Y74.99%
EPS Next 3Y55.41%
30.33
+0.94 (+3.2%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners77.65%
Inst Owner Change0%
Ins Owners0.37%
Ins Owner Change1.54%
Market Cap7.85B
Analysts79
Price Target35.79 (18%)
Short Float %6.66%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
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)17.56%
Min EPS beat(2)3.63%
Max EPS beat(2)31.49%
EPS beat(4)4
Avg EPS beat(4)50.69%
Min EPS beat(4)3.63%
Max EPS beat(4)96.74%
EPS beat(8)6
Avg EPS beat(8)28.27%
EPS beat(12)8
Avg EPS beat(12)-9.6%
EPS beat(16)12
Avg EPS beat(16)-4.38%
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)0%
PT rev (3m)-29.19%
EPS NQ rev (1m)-42.76%
EPS NQ rev (3m)-50.24%
EPS NY rev (1m)-1.4%
EPS NY rev (3m)-13.7%
Revenue NQ rev (1m)-1.51%
Revenue NQ rev (3m)-11.36%
Revenue NY rev (1m)1.06%
Revenue NY rev (3m)-3.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.31 | ||
| Fwd PE | 10.32 | ||
| P/S | 0.62 | ||
| P/FCF | 22.56 | ||
| P/OCF | 8.54 | ||
| P/B | 1.35 | ||
| P/tB | 1.39 | ||
| EV/EBITDA | 4.04 |
EPS(TTM)4.15
EY13.68%
EPS(NY)2.94
Fwd EY9.69%
FCF(TTM)1.34
FCFY4.43%
OCF(TTM)3.55
OCFY11.72%
SpS48.92
BVpS22.46
TBVpS21.77
PEG (NY)0.03
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 14.79% | ||
| ROCE | 13.99% | ||
| ROIC | 11.01% | ||
| ROICexc | 12.29% | ||
| ROICexgc | 12.5% | ||
| 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 | 0.45 | ||
| Debt/FCF | 7.74 | ||
| Debt/EBITDA | 1.17 | ||
| 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 | 1.86 |
F-Score7
WACC9.75%
ROIC/WACC1.13
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)276.6%
EPS 3Y-48.01%
EPS 5YN/A
EPS Q2Q%143.75%
EPS Next Y269.47%
EPS Next 2Y74.99%
EPS Next 3Y55.41%
EPS Next 5Y19.06%
Revenue 1Y (TTM)12.74%
Revenue growth 3Y-0.71%
Revenue growth 5Y2.66%
Sales Q2Q%3.85%
Revenue Next Year6.54%
Revenue Next 2Y2.63%
Revenue Next 3Y3.31%
Revenue Next 5Y-0.91%
EBIT growth 1Y758.78%
EBIT growth 3Y-24.98%
EBIT growth 5Y0.02%
EBIT Next Year109.42%
EBIT Next 3Y34.7%
EBIT Next 5Y9.85%
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%