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What Alcoa's Earnings Mean for Mutual Fund Investors (AA)

Shauna O'Brien Jan 13, 2015

Aluminum company Alcoa (AA) released its fourth quarter financial results after Monday’s closing bell. Here’s what the news means for mutual fund investors.

Inside the Results

Earnings

The company reported Q4 earnings of $159 million, or 11 cents per share, up from a loss of $2.4 billion, or $2.19 per share, a year ago. Excluding special items, earnings were $432 million, or 33 cents per share. Analysts expected to see earnings of 25 cents per share.

Revenue
Revenue rose to $6.4 billion from $5.6 billion last year. Analysts expected to see revenue of $5.99 billion.

Outlook
The company expects aluminum demand to rise 7% in 2015.

Potential to Grow Dividend

In its earnings release, Alcoa’s management was optimistic about the demand for aluminium in 2015. It is notable to mention that the stock has doubled in value since it was removed from the Dow 30 in September 2013. With its impressive growth, value investors and fund managers may be keeping an eye on the stock.

Alcoa currently has a dividend yield of about 0.75% and a payout ratio of 14%. If the company continues to outperform, it is possible that management may decide to boost its dividend.

Mutual Funds to Watch

Investors interested in Alcoa may also be interested in the funds listed below. These funds currently have the largest stakes in the company.

Symbol	Mutual Fund	Stake
VMCIX	Vanguard Mid Cap	1.75%
VTSMX	Vanguard Total Stock Market	1.66%
FPACX	FPA Crescent	1.63%

The Bottom Line

The funds listed above allow investors to gain exposure to Alcoa while remaining diversified. Investors interested in Alcoa may also be interested in Kaiser Aluminum (KALU).