VALE SA-SP ADR (VALE) Stock Fundamental Analysis
NYSE:VALE - New York Stock Exchange, Inc. - US91912E1055 - ADR - Currency: USD
Taking everything into account, VALE scores 6 out of 10 in our fundamental rating. VALE was compared to 150 industry peers in the Metals & Mining industry. VALE scores excellent on profitability, but there are concerns on its financial health. VALE is valued quite cheap, while showing a decent growth score. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year VALE was profitable.
VALE had a positive operating cash flow in the past year.
VALE had positive earnings in 4 of the past 5 years.
In the past 5 years VALE always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of VALE (9.96%) is better than 88.81% of its industry peers.
Looking at the Return On Equity, with a value of 23.14%, VALE belongs to the top of the industry, outperforming 96.50% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.65%, VALE belongs to the top of the industry, outperforming 93.71% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for VALE is significantly above the industry average of 8.84%.
The 3 year average ROIC (22.06%) for VALE is well above the current ROIC(13.65%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.96% | ||
| ROE | 23.14% | ||
| ROIC | 13.65% |
ROA(3y)18.07%
ROA(5y)11.6%
ROE(3y)45.06%
ROE(5y)29.09%
ROIC(3y)22.06%
ROIC(5y)20.11%
1.3 Margins
VALE has a Profit Margin of 22.86%. This is amongst the best in the industry. VALE outperforms 92.31% of its industry peers.
In the last couple of years the Profit Margin of VALE has remained more or less at the same level.
VALE has a better Operating Margin (32.87%) than 89.51% of its industry peers.
VALE's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 39.06%, VALE belongs to the top of the industry, outperforming 80.42% of the companies in the same industry.
In the last couple of years the Gross Margin of VALE has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 32.87% | ||
| PM (TTM) | 22.86% | ||
| GM | 39.06% |
OM growth 3Y-9.01%
OM growth 5Y1.08%
PM growth 3Y13.99%
PM growth 5Y0.12%
GM growth 3Y-8.85%
GM growth 5Y1.33%
2. Health
2.1 Basic Checks
VALE has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
VALE has less shares outstanding than it did 1 year ago.
The number of shares outstanding for VALE has been reduced compared to 5 years ago.
The debt/assets ratio for VALE is higher compared to a year ago.
2.2 Solvency
VALE has an Altman-Z score of 1.79. This is a bad value and indicates that VALE is not financially healthy and even has some risk of bankruptcy.
VALE has a Altman-Z score of 1.79. This is in the lower half of the industry: VALE underperforms 64.34% of its industry peers.
The Debt to FCF ratio of VALE is 3.14, which is a good value as it means it would take VALE, 3.14 years of fcf income to pay off all of its debts.
VALE has a Debt to FCF ratio of 3.14. This is in the better half of the industry: VALE outperforms 74.83% of its industry peers.
VALE has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of VALE (0.34) is worse than 66.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.14 | ||
| Altman-Z | 1.79 |
ROIC/WACC0.83
WACC16.4%
2.3 Liquidity
VALE has a Current Ratio of 0.91. This is a bad value and indicates that VALE is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.91, VALE is not doing good in the industry: 86.71% of the companies in the same industry are doing better.
VALE has a Quick Ratio of 0.91. This is a bad value and indicates that VALE is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.58, VALE is not doing good in the industry: 87.41% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
VALE shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.35%.
Measured over the past years, VALE shows a quite strong growth in Earnings Per Share. The EPS has been growing by 13.07% on average per year.
The Revenue has been growing slightly by 2.33% in the past year.
The Revenue has been growing by 9.12% on average over the past years. This is quite good.
EPS 1Y (TTM)3.35%
EPS 3Y19.96%
EPS 5Y13.07%
EPS Q2Q%-15.15%
Revenue 1Y (TTM)2.33%
Revenue growth 3Y0.32%
Revenue growth 5Y9.12%
Sales Q2Q%-10.07%
3.2 Future
The Earnings Per Share is expected to grow by 2.26% on average over the next years.
Based on estimates for the next years, VALE will show a small growth in Revenue. The Revenue will grow by 0.43% on average per year.
EPS Next Y10.8%
EPS Next 2Y0.38%
EPS Next 3Y2.26%
EPS Next 5YN/A
Revenue Next Year-8.23%
Revenue Next 2Y-3.85%
Revenue Next 3Y-1.36%
Revenue Next 5Y0.43%
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 decreasing.
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
The Price/Earnings ratio is 4.68, which indicates a rather cheap valuation of VALE.
Based on the Price/Earnings ratio, VALE is valued cheaper than 99.30% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.63, VALE is valued rather cheaply.
With a Price/Forward Earnings ratio of 5.48, the valuation of VALE can be described as very cheap.
Based on the Price/Forward Earnings ratio, VALE is valued cheaper than 97.20% of the companies in the same industry.
VALE is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.68 | ||
| Fwd PE | 5.48 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VALE is valued cheaper than 95.80% of the companies in the same industry.
VALE's Price/Free Cash Flow ratio is rather cheap when compared to the industry. VALE is cheaper than 90.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.99 | ||
| EV/EBITDA | 3.5 |
4.3 Compensation for Growth
VALE's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of VALE may justify a higher PE ratio.
PEG (NY)0.43
PEG (5Y)0.36
EPS Next 2Y0.38%
EPS Next 3Y2.26%
5. Dividend
5.1 Amount
VALE has a Yearly Dividend Yield of 1.73%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.16, VALE pays a bit more dividend than its industry peers.
VALE's Dividend Yield is slightly below the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.73% |
5.2 History
On average, the dividend of VALE grows each year by 20.29%, which is quite nice.
VALE has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)20.29%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
VALE pays out 64.05% of its income as dividend. This is not a sustainable payout ratio.
VALE's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP64.05%
EPS Next 2Y0.38%
EPS Next 3Y2.26%
10.11
-0.04 (-0.39%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners44.08%
Inst Owner Change-2.38%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap43.16B
Analysts75.83
Price Target13.76 (36.1%)
Short Float %3.97%
Short Ratio4.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.73% |
Yearly Dividend6.37
Dividend Growth(5Y)20.29%
DP64.05%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)29.4%
Min EPS beat(2)15.68%
Max EPS beat(2)43.12%
EPS beat(4)2
Avg EPS beat(4)-0.28%
Min EPS beat(4)-40.51%
Max EPS beat(4)43.12%
EPS beat(8)4
Avg EPS beat(8)-6.5%
EPS beat(12)8
Avg EPS beat(12)9.74%
EPS beat(16)8
Avg EPS beat(16)-1.3%
Revenue beat(2)0
Avg Revenue beat(2)-82.89%
Min Revenue beat(2)-83.03%
Max Revenue beat(2)-82.76%
Revenue beat(4)0
Avg Revenue beat(4)-82.97%
Min Revenue beat(4)-83.33%
Max Revenue beat(4)-82.76%
Revenue beat(8)0
Avg Revenue beat(8)-73.91%
Revenue beat(12)0
Avg Revenue beat(12)-53.9%
Revenue beat(16)0
Avg Revenue beat(16)-43.61%
PT rev (1m)1.92%
PT rev (3m)-10.22%
EPS NQ rev (1m)-24.52%
EPS NQ rev (3m)-24.44%
EPS NY rev (1m)-5.97%
EPS NY rev (3m)-6.07%
Revenue NQ rev (1m)-9.47%
Revenue NQ rev (3m)-8.64%
Revenue NY rev (1m)-0.3%
Revenue NY rev (3m)-3.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.68 | ||
| Fwd PE | 5.48 | ||
| P/S | 1.17 | ||
| P/FCF | 9.99 | ||
| P/OCF | 4.34 | ||
| P/B | 1.18 | ||
| P/tB | 1.69 | ||
| EV/EBITDA | 3.5 |
EPS(TTM)2.16
EY21.36%
EPS(NY)1.84
Fwd EY18.24%
FCF(TTM)1.01
FCFY10.01%
OCF(TTM)2.33
OCFY23.05%
SpS8.68
BVpS8.57
TBVpS5.99
PEG (NY)0.43
PEG (5Y)0.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.96% | ||
| ROE | 23.14% | ||
| ROCE | 17.28% | ||
| ROIC | 13.65% | ||
| ROICexc | 14.57% | ||
| ROICexgc | 17.5% | ||
| OM | 32.87% | ||
| PM (TTM) | 22.86% | ||
| GM | 39.06% | ||
| FCFM | 11.67% |
ROA(3y)18.07%
ROA(5y)11.6%
ROE(3y)45.06%
ROE(5y)29.09%
ROIC(3y)22.06%
ROIC(5y)20.11%
ROICexc(3y)24.76%
ROICexc(5y)22.97%
ROICexgc(3y)29.07%
ROICexgc(5y)26.84%
ROCE(3y)27.92%
ROCE(5y)25.44%
ROICexcg growth 3Y-11.88%
ROICexcg growth 5Y5.83%
ROICexc growth 3Y-12.09%
ROICexc growth 5Y4.75%
OM growth 3Y-9.01%
OM growth 5Y1.08%
PM growth 3Y13.99%
PM growth 5Y0.12%
GM growth 3Y-8.85%
GM growth 5Y1.33%
F-Score4
Asset Turnover0.44
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.34 | ||
| Debt/FCF | 3.14 | ||
| Debt/EBITDA | 0.84 | ||
| Cap/Depr | 199.76% | ||
| Cap/Sales | 15.19% | ||
| Interest Coverage | 12.25 | ||
| Cash Conversion | 66.37% | ||
| Profit Quality | 51.06% | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 1.79 |
F-Score4
WACC16.4%
ROIC/WACC0.83
Cap/Depr(3y)177.05%
Cap/Depr(5y)152.41%
Cap/Sales(3y)11.97%
Cap/Sales(5y)11.2%
Profit Quality(3y)70.96%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)3.35%
EPS 3Y19.96%
EPS 5Y13.07%
EPS Q2Q%-15.15%
EPS Next Y10.8%
EPS Next 2Y0.38%
EPS Next 3Y2.26%
EPS Next 5YN/A
Revenue 1Y (TTM)2.33%
Revenue growth 3Y0.32%
Revenue growth 5Y9.12%
Sales Q2Q%-10.07%
Revenue Next Year-8.23%
Revenue Next 2Y-3.85%
Revenue Next 3Y-1.36%
Revenue Next 5Y0.43%
EBIT growth 1Y-1.66%
EBIT growth 3Y-8.73%
EBIT growth 5Y10.3%
EBIT Next Year6.83%
EBIT Next 3Y4.9%
EBIT Next 5Y2.84%
FCF growth 1Y-27.2%
FCF growth 3Y-11.99%
FCF growth 5Y1.43%
OCF growth 1Y-3.4%
OCF growth 3Y-4.31%
OCF growth 5Y6.58%