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. RIO scores excellent on profitability, but there are some minor concerns on its financial health. RIO is valued quite cheap, but it does not seem to be growing. These ratings would make RIO suitable 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.
In the past 5 years RIO has always been profitable.
In the past 5 years RIO always reported a positive cash flow from operatings.
1.2 Ratios
RIO's Return On Assets of 11.24% is amongst the best of the industry. RIO outperforms 89.68% of its industry peers.
RIO has a Return On Equity of 20.91%. This is amongst the best in the industry. RIO outperforms 90.97% of its industry peers.
RIO has a Return On Invested Capital of 12.04%. This is amongst the best in the industry. RIO outperforms 90.97% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RIO is above the industry average of 11.08%.
| 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
RIO has a Profit Margin of 21.53%. This is amongst the best in the industry. RIO outperforms 90.97% of its industry peers.
In the last couple of years the Profit Margin of RIO has grown nicely.
With an excellent Operating Margin value of 27.91%, RIO belongs to the best of the industry, outperforming 83.23% of the companies in the same industry.
In the last couple of years the Operating Margin of RIO has declined.
Looking at the Gross Margin, with a value of 47.66%, RIO belongs to the top of the industry, outperforming 88.39% of the companies in the same industry.
In the last couple of years the Gross Margin of RIO has declined.
| 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.
RIO has about the same amout of shares outstanding than it did 5 years ago.
The debt/assets ratio for RIO has been reduced compared to a year ago.
2.2 Solvency
RIO has an Altman-Z score of 2.95. This is not the best score and indicates that RIO is in the grey zone with still only limited risk for bankruptcy at the moment.
RIO has a Altman-Z score (2.95) which is comparable to the rest of the industry.
RIO has a debt to FCF ratio of 2.32. This is a good value and a sign of high solvency as RIO would need 2.32 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.32, RIO is in the better half of the industry, outperforming 79.35% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that RIO is not too dependend on debt financing.
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 | 2.95 |
ROIC/WACC1.22
WACC9.84%
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 68.39% of its industry peers.
A Quick Ratio of 1.13 indicates that RIO should not have too much problems paying its short term obligations.
RIO has a worse Quick ratio (1.13) than 61.94% 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.
RIO shows a decrease in Revenue. In the last year, the revenue decreased by -0.71%.
Measured over the past years, RIO shows a small growth in Revenue. The Revenue has been growing by 4.45% on average per year.
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
The Earnings Per Share is expected to decrease by -3.77% on average over the next years.
Based on estimates for the next years, RIO will show a decrease in Revenue. The Revenue will decrease by -3.00% on average per year.
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-3%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
The Price/Earnings ratio is 8.76, which indicates a very decent valuation of RIO.
Based on the Price/Earnings ratio, RIO is valued cheaply inside the industry as 96.77% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.52, RIO is valued rather cheaply.
RIO is valuated reasonably with a Price/Forward Earnings ratio of 8.99.
81.29% of the companies in the same industry are more expensive than RIO, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.25, RIO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.76 | ||
| Fwd PE | 8.99 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RIO indicates a rather cheap valuation: RIO is cheaper than 90.97% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, RIO is valued cheaply inside the industry as 84.52% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.04 | ||
| EV/EBITDA | 4.81 |
4.3 Compensation for Growth
RIO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)8.29
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 7.06%, RIO is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 2.89, RIO pays a better dividend. On top of this RIO pays more dividend than 96.77% of the companies listed in the same industry.
RIO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.06% |
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.
The dividend of RIO decreased 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.
The Dividend Rate of RIO has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP60.81%
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
59.03
-0.21 (-0.35%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners49.48%
Inst Owner Change4.29%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap95.90B
Analysts79.33
Price Target77.56 (31.39%)
Short Float %0.76%
Short Ratio2.39
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.06% |
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)-0.46%
PT rev (3m)2.47%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-5.1%
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 | 8.76 | ||
| Fwd PE | 8.99 | ||
| P/S | 1.79 | ||
| P/FCF | 16.04 | ||
| P/OCF | 6.15 | ||
| P/B | 1.74 | ||
| P/tB | 1.85 | ||
| EV/EBITDA | 4.81 |
EPS(TTM)6.74
EY11.42%
EPS(NY)6.56
Fwd EY11.12%
FCF(TTM)3.68
FCFY6.23%
OCF(TTM)9.6
OCFY16.27%
SpS33.03
BVpS34
TBVpS31.83
PEG (NY)N/A
PEG (5Y)8.29
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 | 2.95 |
F-Score5
WACC9.84%
ROIC/WACC1.22
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-3%
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 5Y4.02%
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%