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 154 industry peers in the Metals & Mining industry. There are concerns on the financial health of AA while its profitability can be described as average. A decent growth rate in combination with a cheap valuation! Better keep an eye on AA.
1. Profitability
1.1 Basic Checks
AA had positive earnings in the past year.
In the past year AA had a positive cash flow from operations.
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 79.08% of its industry peers.
With an excellent Return On Equity value of 14.79%, AA belongs to the best of the industry, outperforming 86.27% of the companies in the same industry.
The Return On Invested Capital of AA (11.01%) is better than 87.58% 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
The Profit Margin of AA (6.79%) is better than 75.16% of its industry peers.
In the last couple of years the Profit Margin of AA has declined.
The Operating Margin of AA (12.74%) is better than 69.28% of its industry peers.
In the last couple of years the Operating Margin of AA has declined.
With a Gross Margin value of 20.43%, AA perfoms like the industry average, outperforming 58.82% of the companies in the same industry.
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.
AA has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AA has been increased compared to 5 years ago.
AA has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.81 indicates that AA is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.81, AA is not doing good in the industry: 61.44% of the companies in the same industry are doing better.
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.
AA has a better Debt to FCF ratio (7.74) than 65.36% of its industry peers.
AA has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.45, AA is not doing good in the industry: 74.51% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 7.74 | ||
| Altman-Z | 1.81 |
ROIC/WACC1.13
WACC9.76%
2.3 Liquidity
A Current Ratio of 1.71 indicates that AA should not have too much problems paying its short term obligations.
The Current ratio of AA (1.71) is worse than 64.05% of its industry peers.
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.
AA's Quick ratio of 1.00 is on the low side compared to the rest of the industry. AA is outperformed by 66.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1 |
3. Growth
3.1 Past
AA shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 237.06%, which is quite impressive.
The earnings per share for AA have been decreasing by -48.01% on average. This is quite bad
The Revenue has grown by 20.85% in the past year. This is a very strong growth!
AA shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.66% yearly.
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
Based on estimates for the next years, AA will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.80% 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 Y274.73%
EPS Next 2Y73.97%
EPS Next 3Y58.47%
EPS Next 5Y19.8%
Revenue Next Year5.43%
Revenue Next 2Y2.12%
Revenue Next 3Y2.73%
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.
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
The Price/Earnings ratio is 6.83, which indicates a rather cheap valuation of AA.
AA's Price/Earnings ratio is rather cheap when compared to the industry. AA is cheaper than 98.69% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.25, AA is valued rather cheaply.
AA is valuated reasonably with a Price/Forward Earnings ratio of 9.21.
AA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. AA is cheaper than 75.82% of the companies in the same industry.
AA is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.15, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.83 | ||
| Fwd PE | 9.21 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, AA is valued cheaply inside the industry as 95.42% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, AA is valued a bit cheaper than 79.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.92 | ||
| EV/EBITDA | 3.73 |
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)0.02
PEG (5Y)N/A
EPS Next 2Y73.97%
EPS Next 3Y58.47%
5. Dividend
5.1 Amount
AA has a Yearly Dividend Yield of 1.45%.
Compared to an average industry Dividend Yield of 2.97, AA pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.38, AA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
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
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%
26.77
-0.86 (-3.11%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners77.41%
Inst Owner Change1.92%
Ins Owners0.77%
Ins Owner Change1.55%
Market Cap6.93B
Analysts80
Price Target34.74 (29.77%)
Short Float %4.75%
Short Ratio1.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.45% |
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)1.15%
PT rev (3m)-30.78%
EPS NQ rev (1m)-9.01%
EPS NQ rev (3m)-27.17%
EPS NY rev (1m)-3.37%
EPS NY rev (3m)-13.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-15.8%
Revenue NY rev (1m)-1.5%
Revenue NY rev (3m)-7.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.83 | ||
| Fwd PE | 9.21 | ||
| P/S | 0.55 | ||
| P/FCF | 19.92 | ||
| P/OCF | 7.53 | ||
| P/B | 1.19 | ||
| P/tB | 1.23 | ||
| EV/EBITDA | 3.73 |
EPS(TTM)3.92
EY14.64%
EPS(NY)2.91
Fwd EY10.85%
FCF(TTM)1.34
FCFY5.02%
OCF(TTM)3.55
OCFY13.27%
SpS48.92
BVpS22.46
TBVpS21.77
PEG (NY)0.02
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 | 1.81 |
F-Score7
WACC9.76%
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)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 5Y19.8%
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 5Y10.1%
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%