RIO TINTO PLC-SPON ADR (RIO) Stock Fundamental Analysis
NYSE:RIO - New York Stock Exchange, Inc. - US7672041008 - ADR - Currency: USD
We assign a fundamental rating of 5 out of 10 to RIO. RIO was compared to 156 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. This makes RIO very considerable for value investing!
1. Profitability
1.1 Basic Checks
RIO had positive earnings in the past year.
RIO had a positive operating cash flow in the past year.
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
With an excellent Return On Assets value of 11.24%, RIO belongs to the best of the industry, outperforming 89.74% of the companies in the same industry.
RIO has a better Return On Equity (20.91%) than 91.03% of its industry peers.
The Return On Invested Capital of RIO (12.04%) is better than 91.03% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RIO is above the industry average of 10.97%.
| 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's Profit Margin of 21.53% is amongst the best of the industry. RIO outperforms 90.38% of its industry peers.
In the last couple of years the Profit Margin of RIO has grown nicely.
The Operating Margin of RIO (27.91%) is better than 82.69% of its industry peers.
In the last couple of years the Operating Margin of RIO has declined.
The Gross Margin of RIO (47.66%) is better than 87.82% of its industry peers.
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
RIO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it 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
An Altman-Z score of 2.94 indicates that RIO is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.94, RIO is in line with its industry, outperforming 57.69% of the companies in the same 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.
RIO has a better Debt to FCF ratio (2.32) than 79.49% of its industry peers.
A Debt/Equity ratio of 0.24 indicates that RIO is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.24, RIO perfoms like the industry average, outperforming 44.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 2.32 | ||
| Altman-Z | 2.94 |
ROIC/WACC1.24
WACC9.67%
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 68.59% 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 has a worse Quick ratio (1.13) than 62.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.63 | ||
| Quick Ratio | 1.13 |
3. Growth
3.1 Past
The earnings per share for RIO have decreased by -7.54% in the last year.
RIO shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.06% yearly.
RIO shows a decrease in Revenue. In the last year, the revenue decreased by -0.71%.
RIO shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.45% yearly.
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
RIO is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -3.77% yearly.
Based on estimates for the next years, RIO will show a decrease in Revenue. The Revenue will decrease by -0.78% 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-0.78%
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
With a Price/Earnings ratio of 8.72, the valuation of RIO can be described as very reasonable.
RIO's Price/Earnings ratio is rather cheap when compared to the industry. RIO is cheaper than 95.51% of the companies in the same industry.
RIO's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.92.
A Price/Forward Earnings ratio of 8.95 indicates a reasonable valuation of RIO.
79.49% 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 21.49, RIO is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.72 | ||
| Fwd PE | 8.95 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RIO is valued cheaper than 90.38% of the companies in the same industry.
RIO's Price/Free Cash Flow ratio is rather cheap when compared to the industry. RIO is cheaper than 85.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.96 | ||
| EV/EBITDA | 4.78 |
4.3 Compensation for Growth
RIO has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)8.25
EPS Next 2Y-1.44%
EPS Next 3Y1.03%
5. Dividend
5.1 Amount
RIO has a Yearly Dividend Yield of 7.27%, which is a nice return.
RIO's Dividend Yield is rather good when compared to the industry average which is at 2.96. RIO pays more dividend than 94.87% of the companies in the same industry.
RIO's Dividend Yield is rather good when compared to the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.27% |
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%
58.74
+0.16 (+0.27%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners44.47%
Inst Owner Change4.29%
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap95.43B
Analysts79.33
Price Target78.25 (33.21%)
Short Float %0.8%
Short Ratio2.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.27% |
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)0.42%
PT rev (3m)0.88%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)0%
EPS NY rev (3m)-2.65%
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 | 8.72 | ||
| Fwd PE | 8.95 | ||
| P/S | 1.78 | ||
| P/FCF | 15.96 | ||
| P/OCF | 6.12 | ||
| P/B | 1.73 | ||
| P/tB | 1.85 | ||
| EV/EBITDA | 4.78 |
EPS(TTM)6.74
EY11.47%
EPS(NY)6.56
Fwd EY11.17%
FCF(TTM)3.68
FCFY6.26%
OCF(TTM)9.6
OCFY16.35%
SpS33.03
BVpS34
TBVpS31.83
PEG (NY)N/A
PEG (5Y)8.25
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 | 2.94 |
F-Score5
WACC9.67%
ROIC/WACC1.24
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%