ALCOA CORP (AA) Stock Fundamental Analysis
NYSE:AA - New York Stock Exchange, Inc. - US0138721065 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to AA. AA was compared to 155 industry peers in the Metals & Mining industry. AA has a medium profitability rating, but doesn't score so well on its financial health evaluation. A decent growth rate in combination with a cheap valuation! Better keep an eye on AA.
1. Profitability
1.1 Basic Checks
In the past year AA was profitable.
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.
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 79.22% of its industry peers.
AA's Return On Equity of 14.79% is amongst the best of the industry. AA outperforms 87.01% of its industry peers.
AA has a Return On Invested Capital of 11.01%. This is amongst the best in the industry. AA outperforms 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
AA has a Profit Margin of 6.79%. This is in the better half of the industry: AA outperforms 74.03% of its industry peers.
In the last couple of years the Profit Margin of AA has declined.
Looking at the Operating Margin, with a value of 12.74%, AA is in the better half of the industry, outperforming 68.18% of the companies in the same industry.
AA's Operating Margin has declined in the last couple of years.
AA has a Gross Margin (20.43%) which is comparable to the rest of the 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.
The number of shares outstanding for AA has been increased compared to 1 year ago.
Compared to 5 years ago, AA has more shares outstanding
The debt/assets ratio for AA is higher compared to a year ago.
2.2 Solvency
AA has an Altman-Z score of 1.89. This is not the best score and indicates that AA is in the grey zone with still only limited risk for bankruptcy at the moment.
AA has a worse Altman-Z score (1.89) than 61.04% of its industry peers.
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.
With a decent Debt to FCF ratio value of 7.74, AA is doing good in the industry, outperforming 65.58% of the companies in the same industry.
AA has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of AA (0.45) is worse than 74.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 7.74 | ||
| Altman-Z | 1.89 |
ROIC/WACC1.16
WACC9.52%
2.3 Liquidity
AA has a Current Ratio of 1.71. This is a normal value and indicates that AA is financially healthy and should not expect problems in meeting 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.
A Quick Ratio of 1.00 indicates that AA may have some problems paying its short term obligations.
AA has a Quick ratio of 1.00. This is in the lower half of the industry: AA underperforms 66.88% of its industry peers.
| 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.
Looking at the last year, AA shows a very strong growth in Revenue. The Revenue has grown by 20.85%.
The Revenue has been growing slightly by 2.66% on average over the past years.
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
AA is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.06% yearly.
AA is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.91% yearly.
EPS Next Y274.73%
EPS Next 2Y73.97%
EPS Next 3Y58.47%
EPS Next 5Y19.06%
Revenue Next Year5.43%
Revenue Next 2Y2.12%
Revenue Next 3Y2.73%
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 7.95 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 98.70% of the companies listed in the same industry.
AA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.45.
A Price/Forward Earnings ratio of 10.72 indicates a reasonable valuation of AA.
Based on the Price/Forward Earnings ratio, AA is valued a bit cheaper than 74.68% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.89. AA is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.95 | ||
| Fwd PE | 10.72 |
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 79.22% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.17 | ||
| EV/EBITDA | 4.24 |
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.
AA's earnings are expected to grow with 58.47% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.03
PEG (5Y)N/A
EPS Next 2Y73.97%
EPS Next 3Y58.47%
5. Dividend
5.1 Amount
AA has a Yearly Dividend Yield of 1.28%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.90, AA pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.37, AA's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
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
11.28% of the earnings are spent on dividend by AA. This is a low number and sustainable payout ratio.
DP11.28%
EPS Next 2Y73.97%
EPS Next 3Y58.47%
31.15
-0.37 (-1.17%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners77.65%
Inst Owner Change-55.78%
Ins Owners0.37%
Ins Owner Change1.53%
Market Cap8.06B
Analysts79
Price Target34.74 (11.52%)
Short Float %5.61%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
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)-40.71%
EPS NQ rev (3m)-51.99%
EPS NY rev (1m)0%
EPS NY rev (3m)-12.48%
Revenue NQ rev (1m)-1.51%
Revenue NQ rev (3m)-14.71%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-6.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.95 | ||
| Fwd PE | 10.72 | ||
| P/S | 0.64 | ||
| P/FCF | 23.17 | ||
| P/OCF | 8.77 | ||
| P/B | 1.39 | ||
| P/tB | 1.43 | ||
| EV/EBITDA | 4.24 |
EPS(TTM)3.92
EY12.58%
EPS(NY)2.91
Fwd EY9.33%
FCF(TTM)1.34
FCFY4.32%
OCF(TTM)3.55
OCFY11.41%
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 | 1.89 |
F-Score7
WACC9.52%
ROIC/WACC1.16
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 Y274.73%
EPS Next 2Y73.97%
EPS Next 3Y58.47%
EPS Next 5Y19.06%
Revenue 1Y (TTM)20.85%
Revenue growth 3Y-0.71%
Revenue growth 5Y2.66%
Sales Q2Q%29.63%
Revenue Next Year5.43%
Revenue Next 2Y2.12%
Revenue Next 3Y2.73%
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%