Alcoa Inc. (NYSE: AA) saw its status as a Dow Jones Industrial Average component taken away in 2013. It has spent years trying to get down to the right size, even as it has maintained that the global aluminum market should still be twice the current size by 2020. In our annual outlook series, 24/7 Wall St. wants to see what Alcoa’s prospects are for 2014.

It turns out that Alcoa finally managed to have an acceptable year of returns in 2013. After closing at $10.63, Alcoa shares were up 24% in 2013. The S&P 500 index rose by more than 29% and the Dow Jones Industrial Average (DJIA) rose by over 26%. Both major index readings were their highest closing bell prices ever.

There are many macroeconomic factors to consider when it comes to Alcoa. The aluminum business is highly cyclical, and Alcoa’s stock value and sentiment both never have come close to being back at the pre-recession highs. That is part of why it was booted out of the DJIA. You will not hear anyone whispering about the old $30+ buyout rumors any longer either, but you used to.

Most Wall Street strategists are forecasting higher price targets for the stock market in 2014. Will that rise lift Alcoa? The Federal Reserve’s quantitative easing plan is also starting to be tapered, and the hope is that interest rates will not rise to levels that hurt the economy too much. Fortunately, Europe and Asia seem to be exiting recessionary levels. That should at least allow more stability for Alcoa’s ex-U.S. business.

Where the Alcoa story gets interesting is that its stock rose more than 10% in the past month. Shares even hit a 52-week high right at the end of the year. This would lead investors to believe that 2014 could finally be that breakout year in the company’s recovery. In fact, the small 0.3% gain that analysts expect in revenue in 2014 would reverse a slide.

Alcoa used to kick off earnings season, and as a DJIA stock it always mattered. It will be interesting to see if anyone cares now that it has been booted out of the DJIA. Its $11 billion market cap is just hard to call a true economic indicator as when it was a more important company. Its 2013 year-end earnings report is scheduled for January 9, so stay tuned.

Alcoa does not sound cheap at 26 times expected 2014 earnings, but investors generally have to pay up at the cusp years of a turnaround. It remains a question rather than a certainty that Alcoa can scream higher as a stock again.

Its 1.1% dividend yield is also not exactly a sign of great things happening yet. To prove a point, Alcoa’s dividend of $0.03 per quarter is compared to a former quarterly payout of $0.17 per share back in 2008. The yield at the old dividend level would be almost 6.5%, but then Alcoa would be paying out about twice its normalized earnings too.

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