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VALE SA-SP ADR (VALE) Stock Fundamental Analysis

NYSE:VALE - New York Stock Exchange, Inc. - US91912E1055 - ADR

8.87  -0.11 (-1.22%)

After market: 8.87 0 (0%)

Fundamental Rating

6

We assign a fundamental rating of 6 out of 10 to VALE. VALE was compared to 154 industry peers in the Metals & Mining industry. VALE scores excellent on profitability, but there are concerns on its financial health. VALE may be a bit undervalued, certainly considering the very reasonable score on growth


Dividend Valuation Growth Profitability Health

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9

1. Profitability

1.1 Basic Checks

VALE had positive earnings in the past year.
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.
VALE Yearly Net Income VS EBIT VS OCF VS FCFVALE Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50B 100B 150B

1.2 Ratios

VALE has a Return On Assets of 9.96%. This is amongst the best in the industry. VALE outperforms 87.76% of its industry peers.
The Return On Equity of VALE (23.14%) is better than 95.24% of its industry peers.
With an excellent Return On Invested Capital value of 13.65%, VALE belongs to the best of the industry, outperforming 93.20% 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 8.76%.
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 RankSector 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%
VALE Yearly ROA, ROE, ROICVALE Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 40 60

1.3 Margins

Looking at the Profit Margin, with a value of 22.86%, VALE belongs to the top of the industry, outperforming 92.52% of the companies in the same industry.
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 90.48% of its industry peers.
VALE's Operating Margin has been stable in the last couple of years.
VALE's Gross Margin of 39.06% is amongst the best of the industry. VALE outperforms 80.95% of its industry peers.
VALE's Gross Margin has been stable in the last couple of years.
Industry RankSector 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%
VALE Yearly Profit, Operating, Gross MarginsVALE Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 40 -40 60

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3

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.
The number of shares outstanding for VALE has been reduced compared to 1 year ago.
Compared to 5 years ago, VALE has less shares outstanding
Compared to 1 year ago, VALE has a worse debt to assets ratio.
VALE Yearly Shares OutstandingVALE Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B
VALE Yearly Total Debt VS Total AssetsVALE Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 100B 200B 300B 400B

2.2 Solvency

Based on the Altman-Z score of 1.76, we must say that VALE is in the distress zone and has some risk of bankruptcy.
VALE has a Altman-Z score of 1.76. This is in the lower half of the industry: VALE underperforms 62.59% of its industry peers.
VALE has a debt to FCF ratio of 3.14. This is a good value and a sign of high solvency as VALE would need 3.14 years to pay back of all of its debts.
VALE has a better Debt to FCF ratio (3.14) than 73.47% of its industry peers.
A Debt/Equity ratio of 0.34 indicates that VALE is not too dependend on debt financing.
VALE's Debt to Equity ratio of 0.34 is on the low side compared to the rest of the industry. VALE is outperformed by 67.35% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.34
Debt/FCF 3.14
Altman-Z 1.76
ROIC/WACC0.82
WACC16.65%
VALE Yearly LT Debt VS Equity VS FCFVALE Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50B 100B 150B

2.3 Liquidity

A Current Ratio of 0.91 indicates that VALE may have some problems paying its short term obligations.
With a Current ratio value of 0.91, VALE is not doing good in the industry: 87.07% of the companies in the same industry are doing better.
A Quick Ratio of 0.58 indicates that VALE may have some problems paying its short term obligations.
With a Quick ratio value of 0.58, VALE is not doing good in the industry: 87.76% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 0.91
Quick Ratio 0.58
VALE Yearly Current Assets VS Current LiabilitesVALE Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 20B 40B 60B 80B 100B

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4

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 3.35% over the past year.
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.
VALE shows a small growth in Revenue. In the last year, the Revenue has grown by 2.33%.
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 4.35% 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 Y20.32%
EPS Next 2Y8.32%
EPS Next 3Y4.35%
EPS Next 5YN/A
Revenue Next Year-9.58%
Revenue Next 2Y-2.58%
Revenue Next 3Y-0.58%
Revenue Next 5Y0.43%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
VALE Yearly Revenue VS EstimatesVALE Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 50B 100B 150B 200B 250B
VALE Yearly EPS VS EstimatesVALE Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 0 1 2 3 4

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9

4. Valuation

4.1 Price/Earnings Ratio

VALE is valuated cheaply with a Price/Earnings ratio of 4.11.
Based on the Price/Earnings ratio, VALE is valued cheaply inside the industry as 99.32% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of VALE to the average of the S&P500 Index (28.29), we can say VALE is valued rather cheaply.
VALE is valuated cheaply with a Price/Forward Earnings ratio of 4.13.
Based on the Price/Forward Earnings ratio, VALE is valued cheaply inside the industry as 97.28% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, VALE is valued rather cheaply.
Industry RankSector Rank
PE 4.11
Fwd PE 4.13
VALE Price Earnings VS Forward Price EarningsVALE Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, VALE is valued cheaper than 96.60% 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 91.16% of the companies in the same industry.
Industry RankSector Rank
P/FCF 9.3
EV/EBITDA 3.32
VALE Per share dataVALE EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
VALE has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.2
PEG (5Y)0.31
EPS Next 2Y8.32%
EPS Next 3Y4.35%

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4

5. Dividend

5.1 Amount

VALE has a Yearly Dividend Yield of 1.85%. Purely for dividend investing, there may be better candidates out there.
VALE's Dividend Yield is a higher than the industry average which is at 3.22.
VALE's Dividend Yield is comparable with the S&P500 average which is at 2.28.
Industry RankSector Rank
Dividend Yield 1.85%

5.2 History

The dividend of VALE is nicely growing with an annual growth rate of 20.29%!
VALE has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)20.29%
Div Incr Years0
Div Non Decr Years0
VALE Yearly Dividends per shareVALE Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.5 1 1.5 2 2.5

5.3 Sustainability

VALE pays out 64.05% of its income as dividend. This is not a sustainable payout ratio.
The dividend of VALE is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP64.05%
EPS Next 2Y8.32%
EPS Next 3Y4.35%
VALE Yearly Income VS Free CF VS DividendVALE Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 50B 100B
VALE Dividend Payout.VALE Dividend Payout, showing the Payout Ratio.VALE Dividend Payout.PayoutRetained Earnings

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VALE SA-SP ADR

NYSE:VALE (1/22/2025, 4:56:02 PM)

After market: 8.87 0 (0%)

8.87

-0.11 (-1.22%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)10-24 2024-10-24/amc
Earnings (Next)02-20 2025-02-20/amc
Inst Owners44.08%
Inst Owner Change-0.47%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap37.86B
Analysts74.4
Price Target13.51 (52.31%)
Short Float %2%
Short Ratio2.68
Dividend
Industry RankSector Rank
Dividend Yield 1.85%
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)-83.89%
Min Revenue beat(2)-84.02%
Max Revenue beat(2)-83.76%
Revenue beat(4)0
Avg Revenue beat(4)-83.96%
Min Revenue beat(4)-84.3%
Max Revenue beat(4)-83.76%
Revenue beat(8)0
Avg Revenue beat(8)-75.43%
Revenue beat(12)0
Avg Revenue beat(12)-56.58%
Revenue beat(16)0
Avg Revenue beat(16)-46.9%
PT rev (1m)-4.46%
PT rev (3m)-13.12%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-6.48%
EPS NY rev (1m)0%
EPS NY rev (3m)-3.21%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-8.13%
Revenue NY rev (1m)-3%
Revenue NY rev (3m)-4.58%
Valuation
Industry RankSector Rank
PE 4.11
Fwd PE 4.13
P/S 1.09
P/FCF 9.3
P/OCF 4.04
P/B 1.1
P/tB 1.57
EV/EBITDA 3.32
EPS(TTM)2.16
EY24.35%
EPS(NY)2.15
Fwd EY24.21%
FCF(TTM)0.95
FCFY10.75%
OCF(TTM)2.19
OCFY24.74%
SpS8.17
BVpS8.07
TBVpS5.64
PEG (NY)0.2
PEG (5Y)0.31
Profitability
Industry RankSector 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 RankSector 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 1.76
F-Score4
WACC16.65%
ROIC/WACC0.82
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 Y20.32%
EPS Next 2Y8.32%
EPS Next 3Y4.35%
EPS Next 5YN/A
Revenue 1Y (TTM)2.33%
Revenue growth 3Y0.32%
Revenue growth 5Y9.12%
Sales Q2Q%-10.07%
Revenue Next Year-9.58%
Revenue Next 2Y-2.58%
Revenue Next 3Y-0.58%
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%