RIO share price in focus
Founded in 1873, Rio Tinto is a global leader in the exploration, development, production, and processing of minerals and metals. It is currently the world’s second-largest mining and metals company, following BHP.
Rio Tinto’s diverse portfolio is grouped into four key product categories: Aluminium, Copper & Diamonds, Energy & Minerals, and Iron Ore.
Its largest export is iron ore, a critical ingredient in steel production, meaning the company’s performance is closely linked to the price of iron ore and other essential commodities.
MQG shares
Macquarie Group is a multinational investment bank and financial services company that was founded in 1969.
Macquarie’s operations are a bit different to the rest of the big Australian banks. While it does have a normal banking division, it is also an asset management company with investment operations spanning infrastructure, commodities, agriculture, real estate, and global equity markets.
Macquarie prides itself on delivering consistent value to shareholders, with a more than 55-year record of unbroken profitability.
RIO & MQG share price valuation
We would consider RIO to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For CY24, Rio Tinto Ltd reported a debt/equity ratio of 23.9%, meaning the company has more equity than debt.
Over the last 5 years, RIO has delivered an average dividend yield of 6.8% per year. This is important to note if you’re looking for income from your investments.
Finally, in CY24, RIO reported an ROE of 20.3%. For a mature business you generally want to see an ROE of more than 10%, so RIO clears this hurdle.
Macquarie Group Ltd reported a debt/equity ratio of 258.5% in FY24, meaning the company is leveraged.
As for dividends, since 2019 MQG has achieved an average dividend yield of 3.2% per year, and in FY24 reported an ROE of 10.4%
Keep in mind that these are only a small selection of metrics. We don’t have enough information to value the business or make an investment decision. To learn more about valuation, check out one of our free online investing courses.
