RIO TINTO PLC-SPON ADR (RIO) Stock Fundamental Analysis
NYSE:RIO - New York Stock Exchange, Inc. - US7672041008 - ADR - Currency: USD
RIO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 155 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 is cheap, but on the other hand it scores bad on growth. With these ratings, RIO could be worth investigating further 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.
Each year in the past 5 years RIO has been profitable.
RIO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
RIO has a better Return On Assets (11.24%) than 89.68% of its industry peers.
The Return On Equity of RIO (20.91%) is better than 91.61% of its industry peers.
With an excellent Return On Invested Capital value of 12.04%, RIO belongs to the best of the industry, outperforming 90.97% of the companies in the same industry.
RIO had an Average Return On Invested Capital over the past 3 years of 14.66%. This is above the industry average of 11.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.24% | ||
| ROE | 20.91% | ||
| ROIC | 12.04% |
ROA(3y)11.25%
ROA(5y)12.86%
ROE(3y)21.27%
ROE(5y)25.13%
ROIC(3y)14.66%
ROIC(5y)17.06%
1.3 Margins
Looking at the Profit Margin, with a value of 21.53%, RIO belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
RIO's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 27.91%, RIO belongs to the top of the industry, outperforming 82.58% of the companies in the same industry.
In the last couple of years the Operating Margin of RIO has declined.
RIO has a Gross Margin of 47.66%. This is amongst the best in the industry. RIO outperforms 87.74% of its industry peers.
RIO's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.91% | ||
| PM (TTM) | 21.53% | ||
| GM | 47.66% |
OM growth 3Y-15.69%
OM growth 5Y-5.08%
PM growth 3Y-13.49%
PM growth 5Y3.02%
GM growth 3Y-9.8%
GM growth 5Y-2.74%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), RIO is creating some value.
Compared to 1 year ago, RIO has about the same amount of shares outstanding.
Compared to 5 years ago, RIO has about the same amount of shares outstanding.
Compared to 1 year ago, RIO has an improved debt to assets ratio.
2.2 Solvency
RIO has an Altman-Z score of 2.99. This indicates that RIO is financially healthy and has little risk of bankruptcy at the moment.
With a Altman-Z score value of 2.99, RIO perfoms like the industry average, outperforming 54.19% of the companies in the same industry.
The Debt to FCF ratio of RIO is 2.32, which is a good value as it means it would take RIO, 2.32 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of RIO (2.32) is better than 79.35% 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 of 0.24. This is comparable to the rest of the industry: RIO outperforms 45.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 2.32 | ||
| Altman-Z | 2.99 |
ROIC/WACC1.23
WACC9.75%
2.3 Liquidity
RIO has a Current Ratio of 1.63. 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 1.63. This is in the lower half of the industry: RIO underperforms 69.68% of its industry peers.
RIO has a Quick Ratio of 1.13. This is a normal value and indicates that RIO is financially healthy and should not expect problems in meeting its short term obligations.
RIO's Quick ratio of 1.13 is on the low side compared to the rest of the industry. RIO is outperformed by 63.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.63 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
RIO shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.54%.
Measured over the past 5 years, RIO shows a small growth in Earnings Per Share. The EPS has been growing by 1.06% on average per year.
The Revenue has decreased by -0.71% in the past year.
The Revenue has been growing slightly by 4.45% on average over the past years.
EPS 1Y (TTM)-7.54%
EPS 3Y-20.07%
EPS 5Y1.06%
EPS Q2Q%-15.08%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y-5.46%
Revenue growth 5Y4.45%
Sales Q2Q%-1.89%
3.2 Future
Based on estimates for the next years, RIO will show a decrease in Earnings Per Share. The EPS will decrease by -3.77% on average per year.
The Revenue is expected to decrease by -0.78% on average over the next years.
EPS Next Y-2.67%
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
EPS Next 5Y-3.77%
Revenue Next Year-2.89%
Revenue Next 2Y0.5%
Revenue Next 3Y1.71%
Revenue Next 5Y-0.78%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.07, the valuation of RIO can be described as very reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of RIO indicates a rather cheap valuation: RIO is cheaper than 96.13% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. RIO is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 9.31 indicates a reasonable valuation of RIO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of RIO indicates a rather cheap valuation: RIO is cheaper than 81.29% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. RIO is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.07 | ||
| Fwd PE | 9.31 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RIO is valued cheaply inside the industry as 90.97% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, RIO is valued cheaply inside the industry as 86.45% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.61 | ||
| EV/EBITDA | 4.97 |
4.3 Compensation for Growth
The excellent profitability rating of RIO may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)8.58
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
5. Dividend
5.1 Amount
RIO has a Yearly Dividend Yield of 6.98%, which is a nice return.
RIO's Dividend Yield is rather good when compared to the industry average which is at 2.90. RIO pays more dividend than 94.84% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, RIO pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.98% |
5.2 History
The dividend of RIO decreases each year by -7.29%.
RIO has paid a dividend for at least 10 years, which is a reliable track record.
RIO has decreased its dividend recently.
Dividend Growth(5Y)-7.29%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
60.81% of the earnings are spent on dividend by RIO. This is not a sustainable payout ratio.
RIO's earnings and Dividend Rate are declining. This means the current dividend is most likely not sustainable.
DP60.81%
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
61.1
+1 (+1.66%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners44.47%
Inst Owner Change-0.01%
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap99.27B
Analysts77.33
Price Target78.25 (28.07%)
Short Float %0.94%
Short Ratio3.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.98% |
Yearly Dividend4.33
Dividend Growth(5Y)-7.29%
DP60.81%
Div Incr Years1
Div Non Decr Years1
Ex-Date
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)0.89%
PT rev (3m)-0.39%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-2.68%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.07 | ||
| Fwd PE | 9.31 | ||
| P/S | 1.85 | ||
| P/FCF | 16.61 | ||
| P/OCF | 6.36 | ||
| P/B | 1.8 | ||
| P/tB | 1.92 | ||
| EV/EBITDA | 4.97 |
EPS(TTM)6.74
EY11.03%
EPS(NY)6.56
Fwd EY10.74%
FCF(TTM)3.68
FCFY6.02%
OCF(TTM)9.6
OCFY15.71%
SpS33.03
BVpS34
TBVpS31.83
PEG (NY)N/A
PEG (5Y)8.58
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.24% | ||
| ROE | 20.91% | ||
| ROCE | 16.45% | ||
| ROIC | 12.04% | ||
| ROICexc | 13.34% | ||
| ROICexgc | 13.94% | ||
| OM | 27.91% | ||
| PM (TTM) | 21.53% | ||
| GM | 47.66% | ||
| FCFM | 11.14% |
ROA(3y)11.25%
ROA(5y)12.86%
ROE(3y)21.27%
ROE(5y)25.13%
ROIC(3y)14.66%
ROIC(5y)17.06%
ROICexc(3y)16.42%
ROICexc(5y)19.71%
ROICexgc(3y)17.39%
ROICexgc(5y)20.82%
ROCE(3y)20.04%
ROCE(5y)23.31%
ROICexcg growth 3Y-22.87%
ROICexcg growth 5Y-5.32%
ROICexc growth 3Y-22.69%
ROICexc growth 5Y-5.1%
OM growth 3Y-15.69%
OM growth 5Y-5.08%
PM growth 3Y-13.49%
PM growth 5Y3.02%
GM growth 3Y-9.8%
GM growth 5Y-2.74%
F-Score5
Asset Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 2.32 | ||
| Debt/EBITDA | 0.64 | ||
| Cap/Depr | 162.57% | ||
| Cap/Sales | 17.93% | ||
| Interest Coverage | 21.86 | ||
| Cash Conversion | 74.65% | ||
| Profit Quality | 51.75% | ||
| Current Ratio | 1.63 | ||
| Quick Ratio | 1.13 | ||
| Altman-Z | 2.99 |
F-Score5
WACC9.75%
ROIC/WACC1.23
Cap/Depr(3y)143.38%
Cap/Depr(5y)146.4%
Cap/Sales(3y)14.4%
Cap/Sales(5y)13.74%
Profit Quality(3y)69.25%
Profit Quality(5y)78.39%
High Growth Momentum
Growth
EPS 1Y (TTM)-7.54%
EPS 3Y-20.07%
EPS 5Y1.06%
EPS Q2Q%-15.08%
EPS Next Y-2.67%
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
EPS Next 5Y-3.77%
Revenue 1Y (TTM)-0.71%
Revenue growth 3Y-5.46%
Revenue growth 5Y4.45%
Sales Q2Q%-1.89%
Revenue Next Year-2.89%
Revenue Next 2Y0.5%
Revenue Next 3Y1.71%
Revenue Next 5Y-0.78%
EBIT growth 1Y-4.96%
EBIT growth 3Y-20.29%
EBIT growth 5Y-0.86%
EBIT Next Year35.42%
EBIT Next 3Y14.3%
EBIT Next 5Y5.68%
FCF growth 1Y-25.96%
FCF growth 3Y-30.7%
FCF growth 5Y-8.7%
OCF growth 1Y2.9%
OCF growth 3Y-14.94%
OCF growth 5Y0.9%