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.
REH shares
Reece Limited has been operating in Australia for more than 100 years, and is today the country’s largest plumbing and bathroom supplies business.
While best known as a plumbing store, the brand has diversified to offer services and products across irrigation and pools, civil construction projects, and HVAC systems for heating, ventilation, and refrigeration.
Reece has grown revenue at a steady clip the past few years and, while the dividend yield has typically been low, the payments have been quite consistent.
RIO & REH 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.
As for Reece Ltd, they reported a debt/equity ratio of 47.2% in FY24, meaning the company has more equity than debt.
Since 2019 REH has achieved an average dividend yield of 1.1% per year, and in FY24 reported an ROE of 11.2%
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.
