Fact based stock research
Rio Tinto (LSE:RIO)

GB0007188757

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Rio Tinto stock research in summary

riotinto.com

ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Rio Tinto (Diversified Metals & Mining, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Rio Tinto are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 64), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on Rio Tinto's financial characteristics. As the company Rio Tinto's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 21) and low growth (Obermatt Growth Rank of 47), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 64) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	21
Growth Rank	47
Safety Rank	64
Combined Rank	32

Country	United Kingdom
Industry	Diversified Metals & Mining
Index	ASX 100, ASX 200, ASX 300, ASX 50, FTSE All Shares, FTSE 100, FTSE 350, Copper, Dividends Europe, Human Rights, Iron, Lithium, Low Waste, Silver, Water Efficiency
Size class	XX-Large

This stock has achievements: Insight 2021-10-21, Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Rio Tinto

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	45	17	21
GROWTH
GROWTH	52	25	89	47
SAFETY
SAFETY	68	79	49	64
SENTIMENT
SENTIMENT	n/a	53	96	^new
360° VIEW
360° VIEW	n/a	51	76	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Rio Tinto is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	57	45	17	21
GROWTH
GROWTH	52	25	89	47
SAFETY
SAFETY	68	79	49	64
COMBINED
COMBINED	75	49	51	32

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Rio Tinto the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), Rio Tinto shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Rio Tinto. Price-to-Profit (also referred to as price-earnings, P/E) is 65 which means that the stock price compared with what market professionals expect for future profits is lower than for 65% of comparable companies, indicating a good value concerning Rio Tinto's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 23, which means that the stock price is lower as regards to invested capital than for 23% of comparable investments. On the other hand, Price-to-Sales is less favorable than 94% of alternatives (only 6% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 7% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on Rio Tinto's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	33	9	5	6
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	84	56	51	65
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	28	36	14	23
DIVIDEND YIELD
DIVIDEND YIELD	98	88	96	93
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	57	45	17	21

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Rio Tinto; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Rio Tinto shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Rio Tinto. Profit Growth, with a rank of 51 (better than 51% of its competitors), and Capital Growth, with a rank of 76, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Stock Returns are at a rank of 47. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	57	4	28	10
PROFIT GROWTH
PROFIT GROWTH	65	42	67	51
CAPITAL GROWTH
CAPITAL GROWTH	n/a	78	93	76
STOCK RETURNS
STOCK RETURNS	46	31	73	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	52	25	89	47

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Rio Tinto.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Rio Tinto has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Rio Tinto is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Rio Tinto. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 19, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 81% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Rio Tinto has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Rio Tinto. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Rio Tinto and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	69	74	64	70
REFINANCING
REFINANCING	16	25	11	19
LIQUIDITY
LIQUIDITY	100	93	87	82
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	68	79	49	64

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Rio Tinto and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	32	59	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	53	97	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	94	92	^new
MARKET PULSE
MARKET PULSE	n/a	36	61	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	53	96	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Rio Tinto.
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