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Rio Tinto PLC ADR RIO

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Stock XNYS Rating as of
$89.85 −0.69 (0.76%)
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Company Report

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Rio Tinto Shares Overvalued Due to Elevated Iron Ore, Copper, and Aluminum Prices

Jon Mills

Rio Tinto is one of the world’s largest miners with operations in iron ore, aluminum (including bauxite and alumina), copper, lithium, and minerals (mineral sands, borates, salt, diamonds). Commodity demand is tied to global economic growth, China’s in particular. Rio Tinto benefited greatly from the China boom over the past two decades. The firm’s largest customer by far is China, with about 60% of sales in 2025. We think the outlook is for earnings to decline, with demand for many commodities likely to soften with the end of the China boom, particularly iron ore, which has disproportionately benefited from the boom in infrastructure and real estate investment.

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Price vs Fair Value

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RIO is trading at a LOCK|@rsz premium.
Price
$90.54
Fair Value
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Uncertainty
LOCK|<L@$?
1-Star Price
LOCK|B.<
5-Star Price
?$
Economic Moat
LOCK|w?
Capital Allocation
LOCK|pNndFB

Bulls Say, Bears Say

Bulls

Rio Tinto is one of the direct beneficiaries of China's continuing strong appetite for natural resources.

Bears

With miners including Rio benefiting from high commodity prices, governments may use it as a source of tax revenue to plug shaky budgets.

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Trading Information

Previous Close Price
$90.54
Day Range
$89.35–90.85
52-Week Range
$58.16–112.58
Bid/Ask
$89.70 / $90.78
Shares Outstanding
1.63B
Market Cap
$146.12B
Volume/Avg
3M / 3M

Key Statistics

Price/Earnings (Normalized)
13.50
Price/Sales
2.57
Dividend Yield (Trailing)
4.47%
Dividend Yield (Forward)
4.47%
Total Yield
4.47%

Company Profile

Rio Tinto is a global diversified miner. Iron ore is its major commodity, with lesser contributions from copper and aluminum. Lithium, diamonds, gold, and industrial minerals are more minor contributors. The 1995 merger of RTZ and CRA, via a dual-listed structure, created the present-day company. The two operate as a single business entity, with shareholders in each company having equivalent economic and voting rights. Major assets included the Pilbara iron ore operations, a 30% stake in the Escondida copper mine, 66%-ownership of the Oyu Tolgoi copper mine in Mongolia, the Weipa and Gove bauxite mines in Australia, and six hydro-powered aluminum smelters in Canada.
Sector
Basic Materials
Industry
Other Industrial Metals & Mining
Stock Style Box
Large Value
Total Number of Employees
61,230
Website
https://www.riotinto.com

Competitors

Valuation

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Metric
RIO
FMG
BHP
Price/Earnings (Normalized)
 13.509.8218.43
Price/Book Value
 2.371.874.11
Price/Sales
 2.572.293.85
Price/Cash Flow
 8.535.179.69
Price/Earnings
RIO
FMG
BHP

Financial Strength

Metric
RIO
FMG
BHP
Quick Ratio
 0.782.191.25
Current Ratio
 1.443.031.65
Interest Coverage
 8.9316.1211.54
Quick Ratio
RIO
FMG
BHP

Profitability

Metric
RIO
FMG
BHP
Return on Assets (Normalized)
 9.27%12.28%10.39%
Return on Equity (Normalized)
 18.56%18.66%23.83%
Return on Invested Capital (Normalized)
 14.60%15.15%15.85%
Return on Assets
RIO
FMG
BHP

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