4-Star Stocks Poised to Pop: Rio Tinto
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, global mining giant Rio Tinto (NYS: RIO) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Rio Tinto's business and see what CAPS investors are saying about the stock right now.
Rio Tinto facts
Headquarters (Founded) | London (1873) |
Market Cap | $100.4 billion |
Industry | Diversified metals and mining |
Trailing-12-Month Revenue | $61.1 billion |
Management | CEO Tom Albanese (since 2007) CFO Guy Elliott (since 2002) |
Return on Equity (Average, Past 3 Years) | 20% |
Cash/Debt | $7.8 billion / $18.2 billion |
Dividend Yield | 2.2% |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 97% of the 1,623 members who have rated Rio Tinto believe the stock will outperform the S&P 500 going forward. These bulls include PWorm and CheapHessian.
Just last month, PWorm listed several of Rio Tinto's positives:
-Pays a dividend.
-Looks to be way oversold for little to no reason.
-In a position to weather the storm.
-Buying back shares.
-Mines more than just gold which is the current hot topic, but the market will move on to something else. Rio will be there for whatever that something else is.
In fact, Rio Tinto sports a cheapish forward P/E of 5.5. That represents a slight discount to other mining heavyweights like BHP Billiton (NYS: BHP) (9.5), Freeport-McMoRan (NYS: FCX) (7.8), and Teck Resources (NYS: TCK) (7.1).
CAPS member CheapHessian elaborates on the bull case:
The market is too focused on growth and not on inflation. Resource producers will outperform and Rio Tinto has a diversified portfolio in commodities and geography of operations. RIO has a low P/E ratio and makes good cash flow from operations. Although RIO is currently not paying a large dividend, it is making new investments in future coal production. Short-term risks include a continued slow down in China, politics in Africa, carbon taxes, and general labor unrest. Long-term, I think Rio Tinto is positioned to be a relatively safe stock to hold for at least 5 years in this inflationary environment.
What do you think about Rio Tinto, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to trackRio Tinto?Add it to your watchlist.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Freeport. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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