VALE S.A. American Depositary Shares Each Representing one common share (VALE)

FairStock Score: 51/100 — MIXED

Key Financials

Strengths

• Generates $15.4 billion in annual free cash flow (21.1% yield on market cap)
• Attractive 7.2% dividend yield providing steady income returns
• Established organization with 65,805 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($10) with negative 74% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 1.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

VALE S.A. American Depositary Shares Each Representing one common share is a large-cap basic materials company valued at $73.1 billion. Revenue stands at $213.6 billion, though the company is currently unprofitable. From a quality standpoint, VALE shows distressed Altman Z-Score of 1.1 warrants caution and modest 6% ROE. On valuation, the stock is trading at a premium 31.2x earnings, with trades above its Graham Number with a negative 74% margin. Growth dynamics show revenue growing at 9.3% and profit growth of -453.9%. The 7.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 51/100 reflects mixed fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $15.4 billion in annual free cash flow (21.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 31x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer