Rio Tinto Limited
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Rio Tinto Limited (RIO) is engaged in minerals and metals exploration, development, production and processing. The Company's Portfolio of assets is condensed into four product groups: Aluminium, Copper & Diamonds, Energy &Minerals and Iron Ore.
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Metals & Mining
What does Rio Tinto Limited (RIO) do?
Rio Tinto Limited (RIO) does mining, and has been doing it for a while. Founded in 1873 and with head offices in both London and Melbourne, Rio Tinto is a global leader in the exploration, evaluation, development, mining, processing and marketing of mineral resources.
This Anglo-Australian giant operates and earns revenue via four main business segments.
Iron Ore — Via a network of 17 iron ore mines, four port terminals, a rail network spanning nearly 2,000 kilometres and related infrastructure, Rio Tinto mines and produces iron ore, rock salt and gypsum in the Pilbara region of Western Australia (WA).
Aluminium — With a large-scale, vertically-integrated business across more than 10 operations including Saguenay-Lac-Saint-Jean, Weipa, BC Works, Bell Bay and Gove, Rio Tinto mines for Bauxite, refines alumina and smelts aluminium. Rio Tinto delivers these high-grade materials to everyone from beverage packaging companies all the way through to the global seaborne trade or the automotive industry.
Copper — Rio Tinto’s copper operations are at various stages of the mining life cycle. The company has two main operations: the Kennecott mine located outside Salt Lake City in the United States, and the Oyu Tolgoi deposit in Mongolia. The Kennecott mine has been in operation since 1903 and is one of the top copper, gold and silver producers in the world. Once Oyu Tolgoi is operational, it will be the world’s fourth-largest copper mine but also produce gold.
Minerals — The minerals segment produces high-grade, low-impurity iron ore pellets and concentrate, titanium dioxide, diamonds and borates from operations in Canada, Madagascar, South Africa, the United States and Australia. Rio Tinto also reprocesses mining waste to extract valuable by-products such as lithium and scandium.
Rio Tinto is currently at work in 35 countries around the world with the aim of continuing to “produce materials essential to human progress”.
Find Rio Tinto in our list of the top lithium stocks on ASX.
Is Rio Tinto a profitable company?
Yes, Rio Tinto is a very profitable company. However, their net income does fluctuate from year to year.
In FY2017, the company’s net income amounted to A$11.43b but jumped by almost 60% by FY2018 to A$18.27b. In FY2019, net income dropped by 36.9% to A$11.53b but again leapt up to FY2020 to A$14.19b. And in FY2021, Rio Tinto’s net income almost doubled when it skyrocketed 98.05% to A$28.10b.
As of FY2021, Rio Tinto’s free cash flow is a very handsome A$25.38b, up 68.52% on the previous financial year’s A$15.06b.
Is Rio Tinto a good buy?
Between March and May 2022, the Rio Tinto stock price has fallen by approximately 23%. This is possibly due to a slump in iron ore shipments to China, increasing tensions between the Australian and Chinese governments and the resurgence of COVID-19 in Shanghai, which saw the entire city locked down.
For short-term traders, economic volatility caused by these tensions may make RIO stock one to avoid. However, for long-term buy and hold investors, this may be an opportunity to start building a position.
Is RIO a good dividend stock?
In the eyes of some investors, the answer would be yes. RIO stock has reliably paid dividends to shareholders since 1981 and has never stopped.
Most recently in 2021, Rio Tinto paid out dividends twice. The company paid a dividend of A$5.17 per share in April and a dividend of A$7.60 per share in September. The company’s latest dividend of A$6.63 was paid in April 2022.
Rio Tinto also offers shareholders the option of a DRP (Dividend Reinvestment Plan). The DRP gives “shareholders the opportunity to elect for their cash dividend to be used to purchase Rio Tinto ordinary shares in the market.”
Who owns Rio Tinto stock?
At 56.3% of the float, the majority of RIO stock is owned by institutions.
Aluminum Corporation of China (11.27%), Capital Research and Management Company (3.8%), BlackRock (3.22%), State Street Global Advisors (2.44%), The Vanguard Group (2.37%), Norges Bank Investment Management (2.02%), HSBC Global Asset Management (UK) Limited (1.42%), Legal & General Investment Management Limited (1.42%), Baillie Gifford & Co. (1.25%) State Farm Insurance Companies Asset Management Arm (1.05%) and UBS Asset Management (1.01%).
The general public owns 31.6%.
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This does not constitute financial advice. You should do your own research before making an investment decision. Past performance is not a reliable indication of future performance. No representation is made as to the timeliness, reliability, accuracy or completeness of the market data provided.