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

Institutional and Insider Ownership

7.1% of Rio Tinto shares are held by institutional investors. Comparatively, 19.6% of Jaguar Mining shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Rio Tinto and Jaguar Mining, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto 3 9 6 0 2.17
Jaguar Mining 0 0 0 0 N/A

Rio Tinto currently has a consensus price target of $54.69, indicating a potential downside of 4.30%. Given Rio Tinto’s higher probable upside, equities research analysts clearly believe Rio Tinto is more favorable than Jaguar Mining.

Earnings and Valuation

This table compares Rio Tinto and Jaguar Mining’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rio Tinto $40.03 billion 1.85 $8.76 billion $4.79 11.93
Jaguar Mining $105.23 million 0.50 -$2.83 million N/A N/A

Rio Tinto has higher revenue and earnings than Jaguar Mining.

Dividends

Rio Tinto pays an annual dividend of $2.54 per share and has a dividend yield of 4.4%. Jaguar Mining does not pay a dividend. Rio Tinto pays out 53.0% of its earnings in the form of a dividend. Rio Tinto has raised its dividend for 2 consecutive years.

Profitability

This table compares Rio Tinto and Jaguar Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rio Tinto N/A N/A N/A
Jaguar Mining 15.10% 12.92% 8.41%

Risk and Volatility

Rio Tinto has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500. Comparatively, Jaguar Mining has a beta of 158.37, indicating that its stock price is 15,737% more volatile than the S&P 500.

Summary

Rio Tinto beats Jaguar Mining on 8 of the 14 factors compared between the two stocks.

About Rio Tinto

Rio Tinto plc, a mining and metals company, explores for, develops, produces, and processes minerals and metals worldwide. It finds, mines, and processes mineral resources, including aluminum, copper, diamonds, gold, industrial minerals (borates, titanium dioxide, and salt), iron ore, thermal and metallurgical coal, and uranium, as well as sulphuric acid, rhenium, lead carbonate, and selenium. The company was founded in 1873 and is headquartered in London, the United Kingdom. Rio Tinto plc operates as a subsidiary of Rio Tinto Group.

About Jaguar Mining

Jaguar Mining Inc. engages in the acquisition, exploration, development, and operation of gold producing properties in Brazil. Its principal assets include the Turmalina Gold Mine Complex and Caeté Gold Mine Complex located in the Iron Quadrangle in the state of Minas Gerais. The company was founded in 1984 and is headquartered in Toronto, Canada.

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