ALCOA CORP (AA) Stock Fundamental Analysis
NYSE:AA - New York Stock Exchange, Inc. - US0138721065 - Common Stock - Currency: USD
Taking everything into account, AA scores 4 out of 10 in our fundamental rating. AA was compared to 153 industry peers in the Metals & Mining industry. While AA is still in line with the averages on profitability rating, there are concerns on its financial health. AA is valued quite cheap, while showing a decent growth score. This is a good combination!
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.
AA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AA's Return On Assets of 5.90% is fine compared to the rest of the industry. AA outperforms 77.12% of its industry peers.
AA has a Return On Equity of 14.79%. This is amongst the best in the industry. AA outperforms 86.27% of its industry peers.
AA has a Return On Invested Capital of 11.05%. This is amongst the best in the industry. AA outperforms 90.85% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 14.79% | ||
| ROIC | 11.05% |
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 better Profit Margin (6.79%) than 76.47% of its industry peers.
AA's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 12.74%, AA is in the better half of the industry, outperforming 67.97% of the companies in the same industry.
In the last couple of years the Operating Margin of AA has declined.
The Gross Margin of AA (20.43%) 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AA is still creating some value.
The number of shares outstanding for AA has been increased compared to 1 year ago.
AA has more shares outstanding than it did 5 years ago.
AA has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.77, we must say that AA is in the distress zone and has some risk of bankruptcy.
AA has a Altman-Z score of 1.77. This is comparable to the rest of the industry: AA outperforms 40.52% of its industry peers.
AA has a debt to FCF ratio of 7.61. This is a slightly negative value and a sign of low solvency as AA would need 7.61 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.61, AA is in the better half of the industry, outperforming 65.36% of the companies in the same industry.
A Debt/Equity ratio of 0.44 indicates that AA is not too dependend on debt financing.
The Debt to Equity ratio of AA (0.44) is worse than 73.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | 7.61 | ||
| Altman-Z | 1.77 |
ROIC/WACC1.12
WACC9.84%
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: 64.05% of the companies in the same industry are doing better.
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.
With a Quick ratio value of 1.00, AA is not doing good in the industry: 67.97% of the companies in the same industry are doing better.
| 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.
AA shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -48.01% yearly.
AA shows a strong growth in Revenue. In the last year, 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
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.
AA is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.91% yearly.
EPS Next Y287.8%
EPS Next 2Y78.67%
EPS Next 3Y58.47%
EPS Next 5Y19.8%
Revenue Next Year7.03%
Revenue Next 2Y2.5%
Revenue Next 3Y3.77%
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.
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
With a Price/Earnings ratio of 6.26, the valuation of AA can be described as very cheap.
Based on the Price/Earnings ratio, AA is valued cheaply inside the industry as 99.35% of the companies are valued more expensively.
AA's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.85.
Based on the Price/Forward Earnings ratio of 8.01, the valuation of AA can be described as reasonable.
AA's Price/Forward Earnings ratio is rather cheap when compared to the industry. AA is cheaper than 88.89% of the companies in the same industry.
AA is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.77, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.26 | ||
| Fwd PE | 8.01 |
4.2 Price Multiples
AA's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. AA is cheaper than 95.42% 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 79.74% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.26 | ||
| EV/EBITDA | 3.48 |
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.
A more expensive valuation may be justified as AA's earnings are expected to grow with 58.47% in the coming years.
PEG (NY)0.02
PEG (5Y)N/A
EPS Next 2Y78.67%
EPS Next 3Y58.47%
5. Dividend
5.1 Amount
AA has a Yearly Dividend Yield of 1.51%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of AA has falen by -30.52%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 2.90, AA pays a bit more dividend than its industry peers.
AA's Dividend Yield is slightly below the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
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 2Y78.67%
EPS Next 3Y58.47%
24.54
+0.01 (+0.04%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners77.41%
Inst Owner Change-0.1%
Ins Owners0.77%
Ins Owner Change1.21%
Market Cap6.35B
Analysts81.9
Price Target34.35 (39.98%)
Short Float %5.96%
Short Ratio2.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.51% |
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)12.48%
Min EPS beat(2)3.63%
Max EPS beat(2)21.34%
EPS beat(4)4
Avg EPS beat(4)48.15%
Min EPS beat(4)3.63%
Max EPS beat(4)96.74%
EPS beat(8)6
Avg EPS beat(8)27%
EPS beat(12)8
Avg EPS beat(12)-10.45%
EPS beat(16)12
Avg EPS beat(16)-5.01%
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)-31.57%
PT rev (3m)-31.29%
EPS NQ rev (1m)-17.54%
EPS NQ rev (3m)4.08%
EPS NY rev (1m)-9.42%
EPS NY rev (3m)-1.39%
Revenue NQ rev (1m)-11.7%
Revenue NQ rev (3m)6.01%
Revenue NY rev (1m)-5.91%
Revenue NY rev (3m)-2.8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.26 | ||
| Fwd PE | 8.01 | ||
| P/S | 0.5 | ||
| P/FCF | 18.26 | ||
| P/OCF | 6.91 | ||
| P/B | 1.09 | ||
| P/tB | 1.09 | ||
| EV/EBITDA | 3.48 |
EPS(TTM)3.92
EY15.97%
EPS(NY)3.06
Fwd EY12.49%
FCF(TTM)1.34
FCFY5.48%
OCF(TTM)3.55
OCFY14.48%
SpS48.92
BVpS22.46
TBVpS22.46
PEG (NY)0.02
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.9% | ||
| ROE | 14.79% | ||
| ROCE | 13.99% | ||
| ROIC | 11.05% | ||
| ROICexc | 12.34% | ||
| ROICexgc | 12.34% | ||
| 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 | 0.44 | ||
| Debt/FCF | 7.61 | ||
| Debt/EBITDA | 1.15 | ||
| 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 | 1.77 |
F-Score7
WACC9.84%
ROIC/WACC1.12
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 Y287.8%
EPS Next 2Y78.67%
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 Year7.03%
Revenue Next 2Y2.5%
Revenue Next 3Y3.77%
Revenue Next 5Y-0.91%
EBIT growth 1Y758.78%
EBIT growth 3Y-24.98%
EBIT growth 5Y0.02%
EBIT Next Year155.7%
EBIT Next 3Y35.74%
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%