3 Things to Love About Rio Tinto

LONDON -- There are things to love and loathe about most companies. Today, I'm going to tell you about three things to love about Rio Tinto  (LSE: RIO  ) (NYSE: RIO  ) .

I'll also be asking whether these positive factors make this FTSE 100 mining group a good investment today.

Low P/E and high earnings growth
Rio Tinto has the lowest price-to-earnings (P/E) ratio of the Footsie's four megaminers. At a recent share price of 2,904 pence, analyst consensus forecasts put Rio on a P/E of eight for the current year, falling to just seven for 2014. The rating is markedly "cheaper" than peers Anglo American, BHP Billiton, and Glencore Xstrata.

Rio's P/E-to-earnings-growth (PEG) ratio is also attractive. A PEG of less than one is generally considered to be good value. With analysts forecasting double-digit earnings growth, Rio's PEG is 0.8 for the current year, falling to 0.6 for 2014.

Sector-leading income
In addition to RIO's P/E and PEG value characteristics, the stock also offers the highest dividend yield of the Footsie's big four hole-diggers. Analyst forecasts put the yield at 4% for 2013, rising to 4.5% for 2014. So, good dividend growth alongside good earnings growth, if the City experts have got it right.

The other thing I like about Rio when it comes to dividends is that the company publishes its dividend policy within the "Investors" section of its website. Many companies don't put their dividend policy on their website, leaving investors to search through the annual reports -- sometimes having to go back several years to find the definitive policy statement.

New boss
Rio's chief executive Tom Albanese departed abruptly in January after announcing $14 billion of writedowns, due to having paid over the odds to acquire aluminum group Alcan in 2007 and coal company Riversdale in 2011.

Albanese has been replaced by Sam Walsh, a Rio veteran of 20 years, who is well thought of within the mining industry. Walsh has told investors his focus will be on reducing costs and more disciplined investment. Sounds good to me.

A good investment?
Do you believe global demand for natural resources will increase over the next few decades? If so, it's hard not to think that Rio's current value characteristics stack up to make the stock an attractive investment for the long term.

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