Alcoa to Issue Quarterly Dividend of $0.10 (NYSE:AA)

Key Points

• Dividend: Alcoa declared a quarterly dividend of $0.10 per share (annualized $0.40) payable June 5 to holders of record on May 19, implying a yield of about 0.6% and a payout ratio well covered by earnings (15.5% currently; ~5.1% on analysts' forward EPS).
• Q1 miss and market reaction: Alcoa reported Q1 EPS of $1.40 vs. $1.60 expected and revenue of $3.19B vs. $3.35B, its shares traded down roughly 1% to $62.64, and analyst views are mixed—consensus rating "Hold" with a $64.27 target despite several upward revisions (e.g., Morgan Stanley to overweight, $80 target).

Alcoa (NYSE:AA - Get Free Report) announced a quarterly dividend on Thursday, May 7th. Shareholders of record on Tuesday, May 19th will be paid a dividend of 0.10 per share by the industrial products company on Friday, June 5th. This represents a c) annualized dividend and a yield of 0.6%. The ex-dividend date of this dividend is Tuesday, May 19th.

Alcoa has a dividend payout ratio of 15.5% meaning its dividend is sufficiently covered by earnings. Research analysts expect Alcoa to earn $7.91 per share next year, which means the company should continue to be able to cover its $0.40 annual dividend with an expected future payout ratio of 5.1%.

Alcoa Trading Down 1.0%

AA traded down $0.62 during mid-day trading on Thursday, hitting $62.64. The stock had a trading volume of 3,673,229 shares, compared to its average volume of 6,834,783. The stock's fifty day simple moving average is $65.05 and its 200-day simple moving average is $55.26. The company has a debt-to-equity ratio of 0.36, a current ratio of 1.48 and a quick ratio of 0.88. The firm has a market capitalization of $16.53 billion, a price-to-earnings ratio of 15.86 and a beta of 1.51. Alcoa has a 1-year low of $24.40 and a 1-year high of $75.70.

Alcoa (NYSE:AA - Get Free Report) last announced its quarterly earnings results on Thursday, April 16th. The industrial products company reported $1.40 earnings per share for the quarter, missing analysts' consensus estimates of $1.60 by ($0.20). Alcoa had a return on equity of 12.57% and a net margin of 8.27%.The firm had revenue of $3.19 billion for the quarter, compared to the consensus estimate of $3.35 billion. During the same period in the prior year, the business earned $2.15 earnings per share. The company's revenue for the quarter was down 5.2% compared to the same quarter last year. As a group, research analysts forecast that Alcoa will post 7.95 EPS for the current fiscal year.

Analyst Ratings Changes

Several research analysts have weighed in on AA shares. Morgan Stanley upgraded Alcoa from an "equal weight" rating to an "overweight" rating and lifted their target price for the stock from $64.00 to $80.00 in a report on Thursday, April 9th. Weiss Ratings upgraded Alcoa from a "hold (c)" rating to a "hold (c+)" rating in a report on Wednesday, April 29th. Zacks Research upgraded Alcoa from a "hold" rating to a "strong-buy" rating in a report on Friday, April 10th. Citigroup boosted their price objective on Alcoa from $54.00 to $76.00 and gave the company a "buy" rating in a research report on Monday, March 16th. Finally, JPMorgan Chase & Co. raised their target price on shares of Alcoa from $68.00 to $70.00 and gave the stock a "neutral" rating in a report on Thursday, April 9th. One investment analyst has rated the stock with a Strong Buy rating, four have assigned a Buy rating, six have issued a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $64.27.

Alcoa Company Profile

Alcoa Corporation is a global industry leader in the production and management of aluminum, offering an integrated value chain that spans bauxite mining, alumina refining, primary aluminum smelting and the fabrication of value-added products. The company's operations are organized into segments that include raw material extraction, chemical processing and the manufacture of metal mill products and engineered solutions.

Alcoa's product portfolio serves diverse end markets such as aerospace, automotive, packaging, construction, electrical and industrial applications.

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