Today we're going to take a closer look at Large-Cap Basic Materials company Vale, whose shares are currently trading at $9.36. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Vale Has Attractive Multiples and Its Shares Are Discounted:
Vale S.A., together with its subsidiaries, produces and sells iron ore, iron ore pellets, nickel, and copper in Brazil and internationally. The company belongs to the Basic Materials sector, which has an average price to earnings (P/E) ratio of 20.25 and an average price to book (P/B) ratio of 2.31. In contrast, Vale has a trailing 12 month P/E ratio of 6.8 and a P/B ratio of 1.09.
Vale has moved -25.6% over the last year compared to 9.8% for the S&P 500 — a difference of -35.3%. Vale has a 52 week high of $13.14 and a 52 week low of $8.06.
Generally Positive Cash Flows but an Average Current Ratio:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $36,549 | $39,545 | $54,502 | $43,839 | $41,784 | $38,056 |
| Gross Margins | 47% | 56% | 60% | 45% | 42% | 36% |
| Net Margins | -5% | 12% | 41% | 43% | 19% | 16% |
| Net Income (M) | -$1,683 | $4,881 | $22,445 | $18,788 | $7,983 | $6,166 |
| Net Interest Expense (M) | -$3,393 | -$4,813 | $3,119 | $2,268 | -$1,946 | -$3,823 |
| Depreciation & Amort. (M) | $3,503 | $1,254 | -$3,962 | $1,309 | $1,428 | $2,813 |
| Diluted Shares (M) | 5,126 | 5,130 | 4,840 | 4,779 | 4,539 | 4,539 |
| Earnings Per Share | -$0.33 | $0.95 | $4.47 | $3.93 | $1.76 | $1.36 |
| Free Cash Flow (M) | $8,406 | $9,892 | $20,646 | $13,316 | $11,332 | $13,767 |
| CAPEX (M) | $3,704 | $4,430 | $5,033 | $5,446 | $5,920 | n/a |
| Total Debt (M) | $11,842 | $12,473 | $11,150 | $25,424 | $24,942 | $29,584 |
| Net Debt / EBITDA | 0.61 | -0.07 | -0.02 | 1.12 | 1.36 | 1.81 |
| Current Ratio | 1.23 | 1.67 | 1.47 | 1.12 | 1.28 | 1.03 |
