RIO TINTO PLC-SPON ADR (RIO) Stock Fundamental Analysis
NYSE:RIO - New York Stock Exchange, Inc. - US7672041008 - ADR - Currency: USD
Taking everything into account, RIO scores 7 out of 10 in our fundamental rating. RIO was compared to 150 industry peers in the Metals & Mining industry. While RIO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. RIO has a bad growth rate and is valued cheaply. This makes RIO very considerable for value investing!
1. Profitability
1.1 Basic Checks
RIO had positive earnings in the past year.
In the past year RIO had a positive cash flow from operations.
RIO had positive earnings in each of the past 5 years.
RIO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 9.71%, RIO belongs to the top of the industry, outperforming 87.41% of the companies in the same industry.
RIO has a Return On Equity of 18.43%. This is amongst the best in the industry. RIO outperforms 90.21% of its industry peers.
The Return On Invested Capital of RIO (12.33%) is better than 90.21% of its industry peers.
RIO had an Average Return On Invested Capital over the past 3 years of 18.29%. This is significantly above the industry average of 8.84%.
The last Return On Invested Capital (12.33%) for RIO is well below the 3 year average (18.29%), which needs to be investigated, but indicates that RIO had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.71% | ||
| ROE | 18.43% | ||
| ROIC | 12.33% |
ROA(3y)14.34%
ROA(5y)12.43%
ROE(3y)27.97%
ROE(5y)24.89%
ROIC(3y)18.29%
ROIC(5y)17.16%
1.3 Margins
RIO's Profit Margin of 18.61% is amongst the best of the industry. RIO outperforms 88.81% of its industry peers.
RIO's Profit Margin has declined in the last couple of years.
The Operating Margin of RIO (29.16%) is better than 87.41% of its industry peers.
In the last couple of years the Operating Margin of RIO has remained more or less at the same level.
Looking at the Gross Margin, with a value of 50.78%, RIO belongs to the top of the industry, outperforming 88.11% of the companies in the same industry.
In the last couple of years the Gross Margin of RIO has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 29.16% | ||
| PM (TTM) | 18.61% | ||
| GM | 50.78% |
OM growth 3Y-9.89%
OM growth 5Y-1.37%
PM growth 3Y-5.28%
PM growth 5Y-11.17%
GM growth 3Y-4.8%
GM growth 5Y-0.07%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so RIO is creating value.
The number of shares outstanding for RIO remains at a similar level compared to 1 year ago.
The number of shares outstanding for RIO has been reduced compared to 5 years ago.
Compared to 1 year ago, RIO has a worse debt to assets ratio.
2.2 Solvency
RIO has an Altman-Z score of 3.04. This indicates that RIO is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 3.04, RIO perfoms like the industry average, outperforming 58.74% of the companies in the same industry.
RIO has a debt to FCF ratio of 1.78. This is a very positive value and a sign of high solvency as it would only need 1.78 years to pay back of all of its debts.
RIO has a Debt to FCF ratio of 1.78. This is in the better half of the industry: RIO outperforms 79.72% of its industry peers.
RIO has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
RIO has a Debt to Equity ratio (0.24) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.78 | ||
| Altman-Z | 3.04 |
ROIC/WACC1.23
WACC10.04%
2.3 Liquidity
RIO has a Current Ratio of 1.69. This is a normal value and indicates that RIO is financially healthy and should not expect problems in meeting its short term obligations.
RIO has a Current ratio of 1.69. This is in the lower half of the industry: RIO underperforms 66.43% of its industry peers.
A Quick Ratio of 1.17 indicates that RIO should not have too much problems paying its short term obligations.
The Quick ratio of RIO (1.17) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.69 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 13.87% over the past year.
RIO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.20% yearly.
RIO shows a small growth in Revenue. In the last year, the Revenue has grown by 3.30%.
Measured over the past years, RIO shows a small growth in Revenue. The Revenue has been growing by 5.93% on average per year.
EPS 1Y (TTM)13.87%
EPS 3Y-1.99%
EPS 5Y7.2%
EPS Q2Q%0.4%
Revenue 1Y (TTM)3.3%
Revenue growth 3Y6.6%
Revenue growth 5Y5.93%
Sales Q2Q%0.51%
3.2 Future
RIO is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.30% yearly.
The Revenue is expected to grow by 0.22% on average over the next years.
EPS Next Y-3.68%
EPS Next 2Y-2.61%
EPS Next 3Y-1.87%
EPS Next 5Y-0.3%
Revenue Next Year-0.25%
Revenue Next 2Y-0.74%
Revenue Next 3Y-0.05%
Revenue Next 5Y0.22%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
RIO is valuated reasonably with a Price/Earnings ratio of 8.70.
Based on the Price/Earnings ratio, RIO is valued cheaper than 95.80% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. RIO is valued rather cheaply when compared to this.
RIO is valuated reasonably with a Price/Forward Earnings ratio of 9.19.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RIO indicates a rather cheap valuation: RIO is cheaper than 85.31% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of RIO to the average of the S&P500 Index (22.68), we can say RIO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.7 | ||
| Fwd PE | 9.19 |
4.2 Price Multiples
89.51% of the companies in the same industry are more expensive than RIO, based on the Enterprise Value to EBITDA ratio.
RIO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. RIO is cheaper than 86.01% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.78 | ||
| EV/EBITDA | 5.07 |
4.3 Compensation for Growth
The excellent profitability rating of RIO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.21
EPS Next 2Y-2.61%
EPS Next 3Y-1.87%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.71%, RIO is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.16, RIO pays a better dividend. On top of this RIO pays more dividend than 96.50% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, RIO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.71% |
5.2 History
The dividend of RIO has a limited annual growth rate of 4.85%.
RIO has been paying a dividend for at least 10 years, so it has a reliable track record.
RIO has decreased its dividend recently.
Dividend Growth(5Y)4.85%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
RIO pays out 64.33% of its income as dividend. This is not a sustainable payout ratio.
The Dividend Rate of RIO has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP64.33%
EPS Next 2Y-2.61%
EPS Next 3Y-1.87%
63.53
-0.76 (-1.18%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners46.95%
Inst Owner Change-1.02%
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap103.19B
Analysts77.24
Price Target77.11 (21.38%)
Short Float %0.8%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.71% |
Yearly Dividend3.99
Dividend Growth(5Y)4.85%
DP64.33%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)2.63%
PT rev (3m)-1.24%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.44%
EPS NY rev (3m)0.43%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)1.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.7 | ||
| Fwd PE | 9.19 | ||
| P/S | 1.91 | ||
| P/FCF | 12.78 | ||
| P/OCF | 6.81 | ||
| P/B | 1.89 | ||
| P/tB | 2.09 | ||
| EV/EBITDA | 5.07 |
EPS(TTM)7.3
EY11.49%
EPS(NY)6.91
Fwd EY10.88%
FCF(TTM)4.97
FCFY7.82%
OCF(TTM)9.33
OCFY14.69%
SpS33.27
BVpS33.61
TBVpS30.41
PEG (NY)N/A
PEG (5Y)1.21
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.71% | ||
| ROE | 18.43% | ||
| ROCE | 17.35% | ||
| ROIC | 12.33% | ||
| ROICexc | 14% | ||
| ROICexgc | 14.97% | ||
| OM | 29.16% | ||
| PM (TTM) | 18.61% | ||
| GM | 50.78% | ||
| FCFM | 14.94% |
ROA(3y)14.34%
ROA(5y)12.43%
ROE(3y)27.97%
ROE(5y)24.89%
ROIC(3y)18.29%
ROIC(5y)17.16%
ROICexc(3y)21.21%
ROICexc(5y)19.97%
ROICexgc(3y)22.47%
ROICexgc(5y)21.12%
ROCE(3y)25.74%
ROCE(5y)24.15%
ROICexcg growth 3Y-6.51%
ROICexcg growth 5Y1.03%
ROICexc growth 3Y-6.97%
ROICexc growth 5Y0.82%
OM growth 3Y-9.89%
OM growth 5Y-1.37%
PM growth 3Y-5.28%
PM growth 5Y-11.17%
GM growth 3Y-4.8%
GM growth 5Y-0.07%
F-Score4
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.78 | ||
| Debt/EBITDA | 0.62 | ||
| Cap/Depr | 132.85% | ||
| Cap/Sales | 13.11% | ||
| Interest Coverage | 25.75 | ||
| Cash Conversion | 71.87% | ||
| Profit Quality | 80.27% | ||
| Current Ratio | 1.69 | ||
| Quick Ratio | 1.17 | ||
| Altman-Z | 3.04 |
F-Score4
WACC10.04%
ROIC/WACC1.23
Cap/Depr(3y)141.59%
Cap/Depr(5y)138.92%
Cap/Sales(3y)12.3%
Cap/Sales(5y)12.7%
Profit Quality(3y)80.38%
Profit Quality(5y)91.59%
High Growth Momentum
Growth
EPS 1Y (TTM)13.87%
EPS 3Y-1.99%
EPS 5Y7.2%
EPS Q2Q%0.4%
EPS Next Y-3.68%
EPS Next 2Y-2.61%
EPS Next 3Y-1.87%
EPS Next 5Y-0.3%
Revenue 1Y (TTM)3.3%
Revenue growth 3Y6.6%
Revenue growth 5Y5.93%
Sales Q2Q%0.51%
Revenue Next Year-0.25%
Revenue Next 2Y-0.74%
Revenue Next 3Y-0.05%
Revenue Next 5Y0.22%
EBIT growth 1Y-20.76%
EBIT growth 3Y-3.94%
EBIT growth 5Y4.48%
EBIT Next Year31.15%
EBIT Next 3Y10.22%
EBIT Next 5Y6.72%
FCF growth 1Y-13.96%
FCF growth 3Y-5.89%
FCF growth 5Y4.79%
OCF growth 1Y-6.04%
OCF growth 3Y-1.52%
OCF growth 5Y5.1%