RIO share price in focus
Rio Tinto is engaged in minerals and metals exploration, development, production and processing. It was founded in 1873 and is currently the world’s second largest metal and mining company behind BHP.
Rio Tinto’s portfolio of assets is condensed into four product groups: Aluminium, Copper & Diamonds, Energy & Minerals and Iron Ore.
Rio Tinto’s biggest export is iron ore which is the primary component of steel. As such, performance of the company can be strongly driven by the price of iron ore and other key commodities.
WOW shares
Founded in 1924, Woolworths is a retail operator in Australia and New Zealand with over 3,000 stores and over 100,000 employees. It is one of Australia’s largest companies in terms of revenue and market share.
Woolworths’ main operations include supermarkets (under the Woolworths brand in Australia and Countdown in New Zealand), retailing through its discount department stores under the Big W brand, and business-to-business (B2B) brands like PFD. However, its 35%+ market share of Australian groceries is undoubtedly its crown jewel.
Woolworths is a very popular choice for many ASX investors seeking dividend income. Historically, it has consistently paid a fully franked dividend, usually at a yield of over 3%, and offers a very defensive earnings stream with most revenue coming from consumer staples. Its competitive advantage is best summarised as scale (distribution, low costs, etc.) and proximity (most shoppers still shop based on distance to the supermarket).
RIO share price valuation
One way to have a ‘fast read’ of where the RIO share price is could be to study something like dividend yield through time. Remember, the dividend yield is effectively the ‘cash flow’ to a shareholder, but it can fluctuate year-to-year or between payments. Currently, Rio Tinto Ltd shares have a dividend yield of around 5.32%, compared to its 5-year average of 6.42%. Put simply, RIO shares are trading below their historical average dividend yield. Be careful how you interpret this information though – it could mean that dividends have fallen, or that the share price is increasing, or both. In the case of RIO, last year’s dividend was less than the 3-year average, so the dividend has been falling.
WOW is offering a historical dividend yield of around 4.40%, which compares to its 5-year average of 2.92%.The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets. Both of these models would be a better way to value the WOW share price.”)
