Daily Stock Analysis: Vale

Photo by Wance Paleri on Unsplash

Vale SA bears the ticker symbol VALE, and this is my first mention of Vale SA for my new Viking Portfolio but it was selected and my 11th pick for Viital, my seventh Dog of The Week Portfolio.

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. Those, too, may soon be spun off.

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, Brazil.

Three key data points gauge Vale SA:

(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 $16.39 at Thursday’s market close. And, in the past year, VALE’s share price rose by $2.76 or about 20.25%.

If VALE’s stock trades in the range of $8.00 to $20.00 this next year, its recent $16.39 share price might reach $17.20 by next year. My upside increase estimate of $0.81 is $0.02 over the median of one-year target estimates from 21 analysts tracking VALE.

VALE Dividends

Vale SA’s most recent average variable quarterly dividend of $0.1855 per share, equals  $0.74 annually and casts an annual yield of 4.53%.

VALE Returns

Adding the $0.74 annual estimated VALE dividend to my one-year price upside estimate of $0.81 reveals a $1.55 potential gross gain per share.

At Wednesday’s $16.39 closing price, a little under $1000 would buy 61 shares. A $10 broker fee (if charged), paid half at purchase and a half at the sale, might cost us about $0.16 per share.

Subtracting that maybe $0.16 brokerage cost from my estimated $1.55 gross gain makes a net gain of $1.39 X 61 shares = $84.79 for an 8.4% net gain including a 4.53% annual dividend yield.

In one year our $1K investment in shares of Vale SA would generate $45.30 in cash dividends. Of course, a single share of VALE stock at Thursday's $16.39 price is nearly 3 times less than the annual dividend income from our $1000.00 investment.

So, by my dogcatcher ideal, this is a good time to buy VALE shares based on their dividends for the coming year 2023. The current dividend from $1K invested is 2.75 times more than Vale SA’s single share price. Consider yourself alerted

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

More By This Author:

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Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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