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.
SCG shares
Scentre Group is a real estate company focused on shopping centres. The group operates under the Westfield brand in Australia and New Zealand.
Today, Scentre has a portfolio of 42 centres valued at more than $34 billion. Their occupancy rate sits above 99% and the centres receive more than half a billion visitors each year.
The company’s centres are located in prime trade areas, anchored by long-term tenancies with retail outlets that appeal to various consumers across fashion, dining, leisure and entertainment.
RIO & SCG 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 Scentre Group, they reported a debt/equity ratio of 87.3% in CY23, meaning the company has more equity than debt.
Since 2019 SCG has achieved an average dividend yield of 4.8% per year, and in CY23 reported an ROE of 1.0%
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.
