Contrasting Vale (VALE) and Its Competitors

Vale (NYSE: VALE) is one of 61 publicly-traded companies in the “STEEL” industry, but how does it compare to its rivals? We will compare Vale to related businesses based on the strength of its profitability, valuation, analyst recommendations, dividends, earnings, risk and institutional ownership.

Profitability

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This table compares Vale and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vale 16.21% 16.63% 6.91%
Vale Competitors -546.22% 10.40% 6.32%

Volatility and Risk

Vale has a beta of 1.55, indicating that its share price is 55% more volatile than the S&P 500. Comparatively, Vale’s rivals have a beta of 1.72, indicating that their average share price is 72% more volatile than the S&P 500.

Insider & Institutional Ownership

19.1% of Vale shares are owned by institutional investors. Comparatively, 55.9% of shares of all “STEEL” companies are owned by institutional investors. 11.0% of shares of all “STEEL” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Vale and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Vale $33.97 billion $5.51 billion 11.84
Vale Competitors $9.96 billion $425.72 million -7.25

Vale has higher revenue and earnings than its rivals. Vale is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Vale and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vale 0 6 7 0 2.54
Vale Competitors 437 1402 1480 70 2.35

Vale currently has a consensus price target of $13.88, suggesting a potential upside of 10.56%. As a group, “STEEL” companies have a potential upside of 8.03%. Given Vale’s stronger consensus rating and higher possible upside, analysts plainly believe Vale is more favorable than its rivals.

Dividends

Vale pays an annual dividend of $0.25 per share and has a dividend yield of 2.0%. Vale pays out 23.6% of its earnings in the form of a dividend. As a group, “STEEL” companies pay a dividend yield of 2.0% and pay out 38.6% of their earnings in the form of a dividend. Vale is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Summary

Vale beats its rivals on 11 of the 15 factors compared.

About Vale

Vale S.A. is a global producer of iron ore and iron ore pellets, key raw materials for steelmaking, and producer of nickel. The Company also produces copper, metallurgical and thermal coal, potash, phosphates and other fertilizer nutrients, manganese ore, ferroalloys, platinum group metals, gold, silver and cobalt. The Company’s segments include Ferrous minerals, which comprises the production and extraction of ferrous minerals, as iron ore fines, iron ore pellets and its logistic services, manganese and ferroalloys and others ferrous products and services; Coal, which comprises the extraction of metallurgical and thermal coal and its logistic services; Base metals, which includes the production and extraction of non-ferrous minerals, and are presented as nickel and its byproducts, and copper (copper concentrated), and Others, which comprises sales and expenses of other products, services and investments in joint ventures and associate in other business.

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