Stock Analysis: Vale

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Vale SA bears the ticker symbol VALE, and this is my second mention of Vale for this new Viking PortfolioI last mentioned Vale back on December 16th.

Vale is a large global miner and the world’s largest producer of iron ore and pellets.

In recent years the company has sold noncore assets such as its fertilizer, coal, and steel operations to concentrate on iron ore, nickel, and copper.

Earnings are dominated by the bulk materials division, primarily iron ore and iron ore pellets. The base metals division is much smaller, consisting of nickel mines and smelters along with copper mines producing copper in concentrate.

The company was formerly known as Companhia Vale do Rio Doce and changed its name to Vale S.A. in May 2009.

Vale S.A. was founded in 1942 and is headquartered in Rio de Janeiro, Brasil.

Three key data points gauge VALE or any dividend-paying firm. They are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

VALE Price

Vale’s price per share was $15.75 at Monday’s market close. In the past year, VALE’s share price fell $5.48 or about 25.8%.

If VALE stock trades in the range of $10.00 to $20.00 this next year, its recent $15.75 share price might rise to $18.50 by next year. My upside estimate of $2.75 is based on about $0.31 under median of estimates from 22 analysts tracking VALE for brokerages.

VALE Dividend

Vale’s most recent semi-annual annual dividend of $0.354 casts an annual yield of 4.47%.

VALE Returns

Taking the $0.70 annual estimated

VALE dividend and adding the $2.75estimated price upside, reveals a $3.45 potential gross gain per share.

At Monday’s $15.75 closing price, a little under $1000 would buy 63 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.16 per share.

Subtract that maybe $0.16 brokerage cost from my estimated $3.45 gross price upside estimate makes a net amount of $3.29 X 63 shares = $207.27 or a 20.75% net amount.

In the next year, our $1K investment in shares of VALE might generate $44.70 in cash dividends. Furthermore, a single share of VALE at Friday’s $15.75 price is near 3 times less than the $44.70 estimated annual dividend income from a $1000.00 investment.

So, by my dogcatcher ideal, this is a proper time to consider VALEshares, based on their dividends for 2023. The dividend from $1k invested is 2.84 times greater than the single share price. Consider yourself alerted.

All of the estimates above are speculation based on the past history of investment in shares of Vale SA. Only time and money invested in this stock will determine its future market value.

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