Is Rio Tinto (RIO) a Great Value Stock Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Rio Tinto (RIO). RIO is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 8.44, while its industry has an average P/E of 11.07. Over the last 12 months, RIO's Forward P/E has been as high as 12.28 and as low as 6.77, with a median of 8.82.
We also note that RIO holds a PEG ratio of 0.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RIO's PEG compares to its industry's average PEG of 1.19. Within the past year, RIO's PEG has been as high as 0.48 and as low as 0.48, with a median of 0.48.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Rio Tinto is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RIO feels like a great value stock at the moment.
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Rio Tinto PLC (RIO) : Free Stock Analysis Report
