IMPALA PLATINUM/S (OTCMKTS:IMPUY) & Rio Tinto (OTCMKTS:RIO) Critical Review

IMPALA PLATINUM/S (OTCMKTS:IMPUY) and Rio Tinto (NYSE:RIO) are both basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, risk, earnings, profitability, valuation and analyst recommendations.

Dividends

IMPALA PLATINUM/S pays an annual dividend of $0.13 per share and has a dividend yield of 2.7%. Rio Tinto pays an annual dividend of $4.62 per share and has a dividend yield of 10.2%. IMPALA PLATINUM/S pays out 44.8% of its earnings in the form of a dividend. Rio Tinto pays out 73.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Rio Tinto has raised its dividend for 3 consecutive years. Rio Tinto is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

7.4% of Rio Tinto shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for IMPALA PLATINUM/S and Rio Tinto, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IMPALA PLATINUM/S 0 1 0 0 2.00
Rio Tinto 4 11 7 0 2.14

Rio Tinto has a consensus price target of $2,078.50, indicating a potential upside of 4,478.19%. Given Rio Tinto’s stronger consensus rating and higher possible upside, analysts clearly believe Rio Tinto is more favorable than IMPALA PLATINUM/S.

Profitability

This table compares IMPALA PLATINUM/S and Rio Tinto’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IMPALA PLATINUM/S N/A N/A N/A
Rio Tinto N/A N/A N/A

Earnings & Valuation

This table compares IMPALA PLATINUM/S and Rio Tinto’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IMPALA PLATINUM/S $3.43 billion 1.02 $103.71 million $0.29 16.38
Rio Tinto $43.17 billion 1.34 $8.01 billion $6.33 7.17

Rio Tinto has higher revenue and earnings than IMPALA PLATINUM/S. Rio Tinto is trading at a lower price-to-earnings ratio than IMPALA PLATINUM/S, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

IMPALA PLATINUM/S has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Rio Tinto has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Summary

Rio Tinto beats IMPALA PLATINUM/S on 10 of the 13 factors compared between the two stocks.

About IMPALA PLATINUM/S

Impala Platinum Holdings Limited engages in mining, processing, refining, and marketing platinum and associated platinum group metals (PGMs) in South Africa and Zimbabwe. It operates through Mining Operations, Refining Services, Chrome Processing, and Other segments. The company produces platinum, palladium, and rhodium, as well as nickel. It has operations on the PGM-bearing ore bodies, including the Bushveld Complex located in South Africa; and the Great Dyke situated in Zimbabwe. The company also provides smelting and refining services. Impala Platinum Holdings Limited is based in Johannesburg, South Africa.

About Rio Tinto

Rio Tinto Group engages in finding, mining, and processing mineral resources worldwide. The company offers aluminium, silver, molybdenum, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and uranium. It is also involved in the alumina production; primary aluminium smelting; bauxite mining; alumina refining; and ilmenite mining, as well as provision of gypsum. Rio Tinto Group is headquartered in London, the United Kingdom.

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