Vale S.A. ‘s total assets were $94.19 billion at December 31, 2023.
The size of fixed assets was very huge. The amount of property, plant and equipment was $48.4 billion at December 31, 2023, accounting for 51.4% of total assets.
Intangibles were $11.6 billion at December 31, 2023, representing 12.3% of total assets.
Total current assets were $18.7 billion at December 31, 2023, making up 19.9% of total assets.
Vale S.A. ‘s current liabilities were $14.66 billion and its current ratio was 1.28 at December 31, 2023.
Total liabilities were $53.2 billion at December 31, 2023.
The debt ratio was 56.5% at December 31, 2023.
Profitability analysis
Vale S.A. ‘s revenues were $41.78 billion, $43.84 billion and $54.5 billion in 2023, 2022 and 2021, respectively.
Net profit attributable to Vale shareholders was $8 billion, $16.73 billion and $24.74 billion in 2023, 2022 and 2021, respectively.
Cash Flow Analysis
Net cash provided by operations was $13.17 billion, $11.49 billion and $25.68 billion in 2023, 2022 and 2021, respectively.
Capital expenditures were $5.92 billion, $5.45 billion and $5.03 billion in 2023, 2022 and 2021, respectively.
The free cash flow was $7.25 billion, $6.04 billion and $20.65 billion in 2023, 2022 and 2021, respectively.
Vale S.A.’s operating performance in H1 2024
Vale S.A.’s revenues were $18.38 billion in H1 2024, up from $18.1 billion in H1 2023.
Net profit attributable to Vale shareholders was $4.45 billion and $2.73 billion in H1 2024 and H1 2023.
In H1 2024, Vale S.A. ‘s free cash were $2 billion.
Conclusion
Vale S.A. stock price is $10.59 per share, which is equivalent to $ 45.23 billion of market capitalization. Its PE is only 4.66, dividends were $1.40 and dividend yield is 13.20%.
Why is Vale stock price so low? Is there anyone to pike up the money?
In fact, Judging from Vale’s free cash flow, its stock price is absolutely undervalued, but Vale’s operations are dynamic.
We think that two factors affect Vale’s valuation. One factor is china’s demand for iron ore. In fiscal 2023,Vale’s revenue from china was $22.21 billion, accounting for 53.2% of the total revenues. It can be said that Vale’s performance is completely dependent on China. If China’s demand for iron ore has dropped significantly, then Vale’s revenue would also decline significantly.
Another one factor is capital expenditure. In fiscal 2023, Vale said that 2024’s capital expenditures would reach $6.9 billion. The amount of capital expenditures are uncertain, which can greatly affect cash flow.
We think that Vale stock price is unattractive. If you buy Vale’s stock, you may not loss money, but you may not make a lot of money.
In short, Vale’s revenue is completely dependent on China. If you are optimistic about the demand in the Chinese market, you can buy Vale’s stock. If you are pessimistic about China’s demand, you don’t need to buy it at all.
Disclaimer: The content is for reference only and does not constitute investment advice.
