RIO share price in focus
Founded in 1873, Rio Tinto is today the world’s second largest metal and mining company, behind only BHP Group. Rio Tinto is engaged in minerals and metals exploration, development, production and processing.
Rio can be divided into four core business units: Aluminium, Copper & Diamonds, Energy & Minerals and Iron Ore.
Of the four units, iron ore (the primary component in steel manufacturing) is by far the largest export. It’s no surprise then that the performance of the company can be strongly affected by the price of iron ore and other key commodities, making earnings somewhat volatile.
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
One way to have a ‘fast read’ of where the RIO share price is could be to study something like dividend yield over time. This can give us a sense of the stability of the company and whether they can consistently pay out a percentage of profits.
Remember, the dividend yield is basically 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 3.88%, compared to its 5-year average of 6.80%. In other words, RIO shares are trading lower than 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, we can see that last year’s dividend was less than the 3-year average, so the dividend has been falling.
SCG is offering a historical dividend yield of around 4.58%, which compares to its 5-year average of 4.78%.
This is just one of many ways you could put a value on SCG shares. The Rask websites offer free online investing courses, created by analysts explaining valuation methods like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets which can help you learn how to value a company like RIO or SCG.
