Alcoa Stock is Outpacing the Markets: Will That Continue?

AA peaked at nearly $100 earlier this year

May 17, 2022 at 12:17 PM
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Aluminum stock Alcoa Corporation (NYSE:AA) has long been a favorite in this space in the last 12 months. As the tech sector crumbles, value stocks like AA have become quite attractive. Up 55% year-over-year, is that still the case as we approach the six-month mark of 2022?

On the dividend front, Alcoa recently declared a quarterly cash dividend of $0.10 per share, to be paid on June 3 to stockholders of record as of the close of business on May 17. With this, the metals company offers a dividend yield of 0.69% and a forward dividend of $0.40.

Alcoa stock was last seen up 4.2% to trade at $62.77, putting some distance from its year-to-date breakeven level. After AA climbed above $100 in late March, the shares have shed 30% this quarter. The good news; the damage for now has been contained by the $55 level, which happens to coincide with the 260-day moving average. 

Moreover, the metals business’ fundamentals provide uncertainty for long-term investors. As recent as fiscal 2019, AA reported $1.125 billion in net losses and a 22.2% decrease in annual revenues. In addition, Alcoa is expected to see a decline on their top- and bottom-line figures for fiscal 2023. Estimates have AA's earnings decreasing by 12% and their revenues by 1.3%.

Alcoa stock continues to offer an attractive valuation at a forward price-earnings ratio of 4.62 and a price-sales ratio of 0.82. AA is also estimated to end fiscal 2022 with 70.1% earnings growth and 18% revenue growth, making Alcoa stock an option for short-term traders.


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