Rio Tinto Group (RIO) Fundamental Analysis: Bull vs. Bear Case

RIO

Rio Tinto Group

Fundamental data last updated:October 21, 2026

We may earn a commission from partner links. This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate.

company profile

SECTOR

Basic Materials

industry

Industrial Materials

Exchange

NYSE

County of HQ

GB

Next Earnings Date

Pending Announcement

Business Summary

Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore, Aluminium, Copper, and Minerals Segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum segment is involved in bauxite mining; alumina refining; and aluminium smelting. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. The Minerals segment is involved in mining and processing of borates, titanium dioxide feedstock, and iron concentrate and pellets; diamond mining, sorting, and marketing; and development projects for battery materials, such as lithium. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom.

VALUATION

P/E

17.58 Market Cap ($M USD)

$175.52B

Forward P/E

15.64 PEG

1.26 PRICE TO SALES

3.03 PRICE TO BOOK

2.82 EV / EBITDA

9.01 5-Year Average P/E

Free Cash Flow Yield

2.68%

DCF Value

$166.42

Graham Number

$72.76

Price to FCF

37.27 EV to FCF

40.62 Earnings Yield

5.70%

FCF Yield

2.68%

DIVIDEND

Yield

3.76%

Annual Payout

$4.05

Payout Ratio

60.38%

Consecutive Years of Dividend Growth

5-Year Dividend Growth Rate

Financial Health & Profitability

Earnings Per Share

$6.15

Next Year EPS Growth Estimate

$6.91

Next Year Revenue Growth Estimate

$64.51B

Return on Equity (ROE)

16.59%

FREE CASH FLOW

Operating Margin

26.29%

Debt-to-Equity

0.40 Piotroski F-Score

5 Altman Z-Score

3.85 Return on Invested Capital (ROIC)

13.42%

Current Ratio

1.44 Quick Ratio

0.98 Net Debt to EBITDA

0.74 Interest Coverage

18.61 Gross Profit margin

27.08%

FCF PER SHARE

$2.89

REVENUE PER SHARE

$35.55

Gainseekers Quantitative Analysis

Summary

Rio Tinto’s valuation presents a compelling opportunity for discerning investors. Recent pricing indicated it traded below its DCF value, suggesting a potential mispricing by the market. With a Forward P/E of 15.42 and an Earnings Yield of 5.76%, the stock appears reasonably valued, especially given its robust Altman Z-score of 3.85, which underscores financial stability. The company’s solid Return on Equity of 16.59% further highlights effective management and profitability. Overall, Rio Tinto’s financial health is sound, with room for growth.

AI Exposure / Tech Reliance

Operating within the Basic Materials sector, Rio Tinto is well-positioned to leverage AI and modern technology to optimize its mining operations. Automation and data analytics can enhance efficiency and reduce costs, crucial for maintaining competitiveness. However, the industry's capital-intensive nature may slow rapid tech adoption.

The Bull Case

For value or GARP investors, Rio Tinto offers a tantalizing proposition. Its ROIC of 13.42% indicates strong capital efficiency, while a Piotroski F-Score of 5 suggests moderate financial health. The company's operating margin of 26.29% and a TTM yield of 3.79% reflect solid pricing power and shareholder returns. Despite a modest FCF yield, the company's ability to generate cash remains robust, making it an attractive buy for those seeking stable returns.

The Bear Case

Despite its strengths, Rio Tinto is not without risks. The Price/Book ratio of 2.79 and Price/Sales of 3.00 suggest the stock may be overvalued relative to its assets and revenue. Additionally, the stock's proximity to its 52-week high, with only a 5.63% distance, indicates potential technical overextension. The EV to FCF ratio of 40.22 further highlights concerns about cash flow efficiency, warranting caution for potential investors.

Market Sentiment & Smart Money

Short Interest %

Analyst Consensus

Hold

Average Analyst Price Target

$101.75

Institutional Ownership %

1-Year Beta

0.63 Insider Buying % (6 Mo)

Distance to 52-Week High

4.16%

Distance to 52-Week Low

48.52%

EARNINGS SURPRISE %

0.54%

50-DAY SMA

$98.48

200-DAY SMA

$82.10

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.