Rio Tinto Group
Rio Tinto Group Fundamental Analysis
Rio Tinto Group (RIO) shows moderate financial fundamentals with a PE ratio of 15.88, profit margin of 17.29%, and ROE of 16.58%. The company generates $57.7B in annual revenue with weak year-over-year growth of -0.71%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 56.5/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze RIO's fundamental strength across five key dimensions:
Efficiency Score
WeakRIO struggles to generate sufficient returns from assets.
Valuation Score
ExcellentRIO trades at attractive valuation levels.
Growth Score
ModerateRIO shows steady but slowing expansion.
Financial Health Score
ExcellentRIO maintains a strong and stable balance sheet.
Profitability Score
ExcellentRIO achieves industry-leading margins.
Key Financial Metrics
Is RIO Expensive or Cheap?
P/E Ratio
RIO trades at 15.88 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, RIO's PEG of -4.80 indicates potential undervaluation.
Price to Book
The market values Rio Tinto Group at 2.55 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.68 times EBITDA. This is generally considered low.
How Well Does RIO Make Money?
Net Profit Margin
For every $100 in sales, Rio Tinto Group keeps $17.29 as profit after all expenses.
Operating Margin
Core operations generate 25.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.58 in profit for every $100 of shareholder equity.
ROA
Rio Tinto Group generates $7.79 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rio Tinto Group generates strong operating cash flow of $17.07B, reflecting robust business health.
Free Cash Flow
Rio Tinto Group produces free cash flow of $4.79B, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $2.95 in free cash annually.
FCF Yield
RIO converts 3.02% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.88
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-4.80
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.55
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.74
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.40
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.44
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.17
vs 25 benchmark
ROA
Return on assets percentage
0.08
vs 25 benchmark
ROCE
Return on capital employed
0.13
vs 25 benchmark
How RIO Stacks Against Its Sector Peers
| Metric | RIO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.88 | 27.01 | Better (Cheaper) |
| ROE | 16.58% | 949.00% | Weak |
| Net Margin | 17.29% | -16219.00% (disorted) | Strong |
| Debt/Equity | 0.40 | 0.48 | Neutral |
| Current Ratio | 1.44 | 4.42 | Neutral |
| ROA | 7.79% | -6413.00% (disorted) | Weak |
RIO outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rio Tinto Group's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
27.75%
Industry Style: Cyclical, Commodity, Value
High GrowthEPS CAGR
48.22%
Industry Style: Cyclical, Commodity, Value
High GrowthFCF CAGR
7.51%
Industry Style: Cyclical, Commodity, Value
Growing