I’ve been keeping an eye on Rio Tinto Limited (ASX:RIO) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RIO has a lot to offer. Basically, it is a financially-robust , dividend-paying company with a a strong track record of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Rio Tinto here.
Outstanding track record with excellent balance sheet and pays a dividend
Over the past year, RIO has grown its earnings by 58.4%, with its most recent figure exceeding its annual average over the past five years. This illustrates a strong track record, leading to a satisfying return on equity of 20.7%. which is what investors like to see! RIO’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that RIO manages its cash and cost levels well, which is a key determinant of the company’s health. RIO’s has produced operating cash levels of 0.99x total debt over the past year, which implies that RIO’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
RIO is also a dividend company, with ample net income to cover its dividend payout, which has been consistently growing over the past decade, keeping income investors happy.
For Rio Tinto, I’ve compiled three important aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for RIO’s future growth? Take a look at our free research report of analyst consensus for RIO’s outlook.
- Valuation: What is RIO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether RIO is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RIO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.