VALE SA-SP ADR (VALE) Stock Fundamental Analysis
USA - NYSE:VALE - US91912E1055 - ADR
10.86 USD
+0.11 (+1.02%)
10.79 USD
-0.07 (-0.64%)
VALE gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 156 industry peers in the Metals & Mining industry. While VALE belongs to the best of the industry regarding profitability, there are concerns on its financial health. VALE has a bad growth rate and is valued cheaply.
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 each of the past 5 years.
Each year in the past 5 years VALE had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.87%, VALE is in the better half of the industry, outperforming 78.85% of the companies in the same industry.
VALE has a better Return On Equity (13.52%) than 85.90% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.88%, VALE belongs to the top of the industry, outperforming 85.26% of the companies in the same industry.
VALE had an Average Return On Invested Capital over the past 3 years of 15.63%. This is above the industry average of 12.87%.
The 3 year average ROIC (15.63%) for VALE is well above the current ROIC(10.88%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 13.52% | ||
| ROIC | 10.88% |
ROA(3y)12.09%
ROA(5y)13.23%
ROE(3y)29.15%
ROE(5y)32.97%
ROIC(3y)15.63%
ROIC(5y)19.92%
1.3 Margins
VALE's Profit Margin of 13.81% is fine compared to the rest of the industry. VALE outperforms 79.49% of its industry peers.
In the last couple of years the Profit Margin of VALE has declined.
With a decent Operating Margin value of 26.56%, VALE is doing good in the industry, outperforming 79.49% of the companies in the same industry.
In the last couple of years the Operating Margin of VALE has declined.
VALE's Gross Margin of 34.24% is fine compared to the rest of the industry. VALE outperforms 74.36% of its industry peers.
In the last couple of years the Gross Margin of VALE has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.56% | ||
| PM (TTM) | 13.81% | ||
| GM | 34.24% |
OM growth 3Y-20.55%
OM growth 5Y-6.5%
PM growth 3Y-28.12%
PM growth 5YN/A
GM growth 3Y-15.48%
GM growth 5Y-5.12%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), VALE 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.
2.2 Solvency
Based on the Altman-Z score of 1.73, we must say that VALE is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of VALE (1.73) is worse than 73.72% of its industry peers.
VALE has a debt to FCF ratio of 8.67. This is a slightly negative value and a sign of low solvency as VALE would need 8.67 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.67, VALE is in the better half of the industry, outperforming 66.03% of the companies in the same industry.
A Debt/Equity ratio of 0.43 indicates that VALE is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.43, VALE is not doing good in the industry: 73.72% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 8.67 | ||
| Altman-Z | 1.73 |
ROIC/WACC0.81
WACC13.35%
2.3 Liquidity
A Current Ratio of 1.22 indicates that VALE should not have too much problems paying its short term obligations.
With a Current ratio value of 1.22, VALE is not doing good in the industry: 78.85% of the companies in the same industry are doing better.
VALE has a Quick Ratio of 1.22. This is a bad value and indicates that VALE is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.85, VALE is doing worse than 76.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.85 |
3. Growth
3.1 Past
VALE shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -45.58%.
The Earnings Per Share has been growing slightly by 5.15% on average over the past years.
VALE shows a decrease in Revenue. In the last year, the revenue decreased by -0.24%.
The Revenue has been growing slightly by 7.33% on average over the past years.
EPS 1Y (TTM)-45.58%
EPS 3Y-31.35%
EPS 5Y5.15%
EPS Q2Q%-23.08%
Revenue 1Y (TTM)-0.24%
Revenue growth 3Y-11.13%
Revenue growth 5Y7.33%
Sales Q2Q%-11.25%
3.2 Future
VALE is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.53% yearly.
Based on estimates for the next years, VALE will show a small growth in Revenue. The Revenue will grow by 0.22% on average per year.
EPS Next Y26.07%
EPS Next 2Y11.9%
EPS Next 3Y9.53%
EPS Next 5YN/A
Revenue Next Year-2.22%
Revenue Next 2Y1.5%
Revenue Next 3Y2.23%
Revenue Next 5Y0.22%
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 8.83, the valuation of VALE can be described as very reasonable.
Based on the Price/Earnings ratio, VALE is valued cheaper than 98.72% of the companies in the same industry.
When comparing the Price/Earnings ratio of VALE to the average of the S&P500 Index (27.76), we can say VALE is valued rather cheaply.
A Price/Forward Earnings ratio of 6.02 indicates a rather cheap valuation of VALE.
Compared to the rest of the industry, the Price/Forward Earnings ratio of VALE indicates a rather cheap valuation: VALE is cheaper than 98.08% of the companies listed in the same industry.
VALE is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.18, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.83 | ||
| Fwd PE | 6.02 |
4.2 Price Multiples
VALE's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. VALE is cheaper than 96.79% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, VALE is valued cheaper than 83.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.01 | ||
| EV/EBITDA | 4.24 |
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 decent profitability rating of VALE may justify a higher PE ratio.
PEG (NY)0.34
PEG (5Y)1.71
EPS Next 2Y11.9%
EPS Next 3Y9.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.40%, VALE has a reasonable but not impressive dividend return.
VALE's Dividend Yield is a higher than the industry average which is at 2.48.
Compared to an average S&P500 Dividend Yield of 2.41, VALE's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
5.2 History
On average, the dividend of VALE grows each year by 104.30%, which is quite nice.
VALE has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)104.3%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
VALE pays out 70.13% 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.
DP70.13%
EPS Next 2Y11.9%
EPS Next 3Y9.53%
10.86
+0.11 (+1.02%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners40.01%
Inst Owner Change-1.08%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap46.36B
Analysts76.67
Price Target13.55 (24.77%)
Short Float %1.74%
Short Ratio1.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
Yearly Dividend0.9
Dividend Growth(5Y)104.3%
DP70.13%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)13.47%
Min EPS beat(2)-12.03%
Max EPS beat(2)38.96%
EPS beat(4)2
Avg EPS beat(4)-23.15%
Min EPS beat(4)-135.22%
Max EPS beat(4)38.96%
EPS beat(8)4
Avg EPS beat(8)-12.86%
EPS beat(12)6
Avg EPS beat(12)-7.78%
EPS beat(16)9
Avg EPS beat(16)-1.9%
Revenue beat(2)0
Avg Revenue beat(2)-81.69%
Min Revenue beat(2)-81.83%
Max Revenue beat(2)-81.56%
Revenue beat(4)0
Avg Revenue beat(4)-81.68%
Min Revenue beat(4)-81.83%
Max Revenue beat(4)-81.56%
Revenue beat(8)0
Avg Revenue beat(8)-81.84%
Revenue beat(12)0
Avg Revenue beat(12)-69.03%
Revenue beat(16)0
Avg Revenue beat(16)-54.48%
PT rev (1m)-3.93%
PT rev (3m)-5.51%
EPS NQ rev (1m)-1.82%
EPS NQ rev (3m)6.71%
EPS NY rev (1m)13.17%
EPS NY rev (3m)-2.87%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)-1.15%
Revenue NY rev (1m)0.39%
Revenue NY rev (3m)-1.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.83 | ||
| Fwd PE | 6.02 | ||
| P/S | 1.18 | ||
| P/FCF | 22.01 | ||
| P/OCF | 5.31 | ||
| P/B | 1.15 | ||
| P/tB | 1.59 | ||
| EV/EBITDA | 4.24 |
EPS(TTM)1.23
EY11.33%
EPS(NY)1.8
Fwd EY16.6%
FCF(TTM)0.49
FCFY4.54%
OCF(TTM)2.04
OCFY18.83%
SpS9.21
BVpS9.41
TBVpS6.84
PEG (NY)0.34
PEG (5Y)1.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.87% | ||
| ROE | 13.52% | ||
| ROCE | 13.44% | ||
| ROIC | 10.88% | ||
| ROICexc | 11.76% | ||
| ROICexgc | 13.88% | ||
| OM | 26.56% | ||
| PM (TTM) | 13.81% | ||
| GM | 34.24% | ||
| FCFM | 5.36% |
ROA(3y)12.09%
ROA(5y)13.23%
ROE(3y)29.15%
ROE(5y)32.97%
ROIC(3y)15.63%
ROIC(5y)19.92%
ROICexc(3y)16.65%
ROICexc(5y)22.69%
ROICexgc(3y)19.73%
ROICexgc(5y)26.7%
ROCE(3y)19.31%
ROCE(5y)24.6%
ROICexcg growth 3Y-31.02%
ROICexcg growth 5Y-4.69%
ROICexc growth 3Y-31.7%
ROICexc growth 5Y-5.74%
OM growth 3Y-20.55%
OM growth 5Y-6.5%
PM growth 3Y-28.12%
PM growth 5YN/A
GM growth 3Y-15.48%
GM growth 5Y-5.12%
F-Score4
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 8.67 | ||
| Debt/EBITDA | 1.27 | ||
| Cap/Depr | 203.29% | ||
| Cap/Sales | 16.85% | ||
| Interest Coverage | 8.07 | ||
| Cash Conversion | 63.72% | ||
| Profit Quality | 38.8% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.85 | ||
| Altman-Z | 1.73 |
F-Score4
WACC13.35%
ROIC/WACC0.81
Cap/Depr(3y)192.28%
Cap/Depr(5y)174.88%
Cap/Sales(3y)14.54%
Cap/Sales(5y)12.69%
Profit Quality(3y)56.79%
Profit Quality(5y)92.18%
High Growth Momentum
Growth
EPS 1Y (TTM)-45.58%
EPS 3Y-31.35%
EPS 5Y5.15%
EPS Q2Q%-23.08%
EPS Next Y26.07%
EPS Next 2Y11.9%
EPS Next 3Y9.53%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.24%
Revenue growth 3Y-11.13%
Revenue growth 5Y7.33%
Sales Q2Q%-11.25%
Revenue Next Year-2.22%
Revenue Next 2Y1.5%
Revenue Next 3Y2.23%
Revenue Next 5Y0.22%
EBIT growth 1Y-23.99%
EBIT growth 3Y-29.39%
EBIT growth 5Y0.36%
EBIT Next Year17.78%
EBIT Next 3Y9.1%
EBIT Next 5Y4.01%
FCF growth 1Y-58.9%
FCF growth 3Y-48.33%
FCF growth 5Y-14.71%
OCF growth 1Y-15.41%
OCF growth 3Y-28.4%
OCF growth 5Y1.2%