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
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
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.
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