Analyzing NYSE:VALE's Dividend Potential.

Take a closer look at VALE SA-SP ADR (NYSE:VALE), a stock of interest to dividend investors uncovered by our stock screener. NYSE:VALE excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Evaluating Dividend: NYSE:VALE

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. NYSE:VALE was assigned a score of 7 for dividend:

• With a Yearly Dividend Yield of 6.14%, VALE is a good candidate for dividend investing.
• VALE's Dividend Yield is rather good when compared to the industry average which is at 3.43. VALE pays more dividend than 94.77% of the companies in the same industry.
• Compared to an average S&P500 Dividend Yield of 2.68, VALE pays a better dividend.
• On average, the dividend of VALE grows each year by 52.04%, which is quite nice.
• VALE has paid a dividend for at least 10 years, which is a reliable track record.

Looking at the Health

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:VALE, the assigned 5 reflects its health status:

• VALE has a debt to FCF ratio of 2.46. This is a good value and a sign of high solvency as VALE would need 2.46 years to pay back of all of its debts.
• VALE's Debt to FCF ratio of 2.46 is fine compared to the rest of the industry. VALE outperforms 79.08% 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.
• Even though the debt/equity ratio score it not favorable for VALE, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

Understanding NYSE:VALE's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:VALE has achieved a 9:

• VALE's Return On Assets of 12.91% is amongst the best of the industry. VALE outperforms 90.20% of its industry peers.
• VALE has a Return On Equity of 30.45%. This is amongst the best in the industry. VALE outperforms 96.08% of its industry peers.
• VALE has a better Return On Invested Capital (15.64%) than 87.58% of its industry peers.
• VALE had an Average Return On Invested Capital over the past 3 years of 25.08%. This is significantly above the industry average of 9.47%.
• The 3 year average ROIC (25.08%) for VALE is well above the current ROIC(15.64%). The reason for the recent decline needs to be investigated.
• Looking at the Profit Margin, with a value of 27.58%, VALE belongs to the top of the industry, outperforming 92.16% of the companies in the same industry.
• In the last couple of years the Profit Margin of VALE has grown nicely.
• The Operating Margin of VALE (33.66%) is better than 89.54% of its industry peers.
• VALE's Operating Margin has improved in the last couple of years.
• Looking at the Gross Margin, with a value of 39.09%, VALE belongs to the top of the industry, outperforming 80.39% of the companies in the same industry.
• In the last couple of years the Gross Margin of VALE has grown nicely.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of VALE

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.