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Rio Tinto plc Message Board

  • makersofthemselves makersofthemselves Sep 7, 2007 4:09 PM Flag

    Big appreciation for RTP

    At the same time, the acquisition has emphasized the tremendous value that appears to exist in Rio Tinto. With our topsy-turvy market inducing a flight to quality among investors, and with the international economy seeming stronger than that of the U.S., Rio Tinto appears to be a name with which Fools should familiarize themselves.

    In addition to aluminum, the $24 billion company produces copper, diamonds, energy, coal, uranium, gold, industrial minerals, and iron ore. It operates across much of the world, including North America, Europe, Asia, Australia, and New Zealand.

    But beyond its scope, I find a lot to like in its metrics. For instance, many Fools know that I'm intrigued by the PEG ratio as a reflection of whether or not the market has factored in a company's likely expansion. Rio Tinto's is an unusually attractive 0.5. Now, mix that together with a 38.2% return on equity, an 11.4 times forward P/E (December 2008), and a balance sheet that's so strong the company was easily able to borrow the funds necessary for the Alcan deal. Next, sprinkle on an indicated forward annual dividend yield of 1.5% -- its five-year average rate has been 2.7% -- and you have the recipe for a company that could fortify your investment portfolio nicely.

    For related Foolishness:

    Is Alcoa's Bid for Alcan Backwards?
    Market Testing Freeport's

32.87+0.45(+1.39%)Oct 21 4:01 PMEDT