Getting to Know the Basics of VALE Stock

Now trading at a price of $11.61, Vale has moved 4.2% so far today.

Vale returned losses of -16.8% last year, with its stock price reaching a high of $16.08 and a low of $10.99. Over the same period, the stock underperformed the S&P 500 index by -40.7%. AThe company's 50-day average price was $11.98. Vale S.A., together with its subsidiaries, produces and sells iron ore, iron ore pellets, nickel, and copper in Brazil and internationally. The Large-Cap Basic Materials company is headquartered in Rio De Janeiro, Brazil. Vale has offered a 62.7% dividend yield over the last 12 months.

Wider Gross Margins Than the Industry Average of 23.0%:

2018 2019 2020 2021 2022 2023
Revenue (M) $36,575 $36,549 $39,545 $54,502 $43,839 $41,784
Gross Margins 40% 47% 56% 60% 45% 42%
Net Margins 19% -5% 12% 41% 43% 19%
Net Income (M) $6,860 -$1,683 $4,881 $22,445 $18,788 $7,983
Net Interest Expense (M) -$4,957 -$3,393 -$4,813 $3,119 $2,268 -$1,946
Depreciation & Amort. (M) $3,211 $3,503 $1,254 -$3,962 $1,309 $1,428
Diluted Shares (M) 5,126 5,126 5,130 4,840 4,779 4,539
Earnings Per Share $1.34 -$0.33 $0.95 $4.47 $3.93 $1.76
Free Cash Flow (M) $9,117 $8,406 $9,892 $20,646 $13,316 $11,332
CAPEX (M) $3,784 $3,704 $4,430 $5,033 $5,446 $5,920
Current Ratio 1.68 1.23 1.67 1.47 1.12 1.28

Vale has generally positive cash flows, slight revenue growth and increasing reinvestment in the business, and wider gross margins than its peer group. Furthermore, Vale has just enough current assets to cover current liabilities, as shown by its current ratio of 1.28.

Vale Has Attractive Multiples and Potentially Undervalued:

Vale has a trailing twelve month P/E ratio of 6.6, compared to an average of 22.71 for the Basic Materials sector. Based on its EPS guidance of $2.16, the company has a forward P/E ratio of 5.5. The 7.1% compound average growth rate of Vale's historical and projected earnings per share yields a PEG ratio of 0.94. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing Vale in terms of its equity because its P/B ratio is 0.27 whereas the sector average is 3.12. The company's shares are currently trading -38.6% above their Graham number.

Vale Has an Average Rating of Buy:

The 20 analysts following Vale have set target prices ranging from $12.7 to $18.0 per share, for an average of $15.51 with a buy rating. The company is trading -25.1% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

The largest shareholder is Goldman Sachs Group Inc, whose 2% stake in the company is worth $1,096,598,461.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.