Rio Tinto Plc Common Stock (RIO)

FairStock Score: 57/100 — STEADY

Key Financials

Strengths

• Generates $3.5 billion in annual free cash flow (2.2% yield on market cap)
• Solid return on equity of 16.4% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.35, providing financial flexibility
• Attractive 4.1% dividend yield providing steady income returns
• Established organization with 56,890 employees providing operational scale

Concerns

• Weak Piotroski F-Score of 1/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Rio Tinto Plc Common Stock is a large-cap basic materials company valued at $160.9 billion. Revenue stands at $57.6 billion. From a quality standpoint, Rio shows weak Piotroski F-Score of 1/9 signaling deteriorating fundamentals and Altman Z-Score of 2.2 in the grey zone. On valuation, the stock is reasonably priced at 16.3x earnings, with trades above its Graham Number with a negative 37% margin. The 4.1% dividend yield adds an income component for patient holders. Our composite FairStock Score of 57/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Rio's dominant market position and scale advantages create a durable moat that supports premium valuation over time. With $3.5 billion in annual free cash flow (2.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the basic materials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer