In This Article:
Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Rio Tinto Group (LON:RIO) due to its excellent fundamentals in more than one area. RIO is a financially-sound , dividend-paying company with a a great track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Rio Tinto Group here.
Outstanding track record with excellent balance sheet and pays a dividend
Over the past year, RIO has grown its earnings by 56%, 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 28%. which is what investors like to see! RIO's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that RIO has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. RIO's has produced operating cash levels of 0.93x 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.
Income investors would also be happy to know that RIO is a great dividend company, with a current yield standing at 4.8%. RIO has also been regularly increasing its dividend payments to shareholders over the past decade.
Next Steps:
For Rio Tinto Group, I've compiled three important factors you should further examine:
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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.
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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.
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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!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.