Financial Analysis: Cerro Grande Mining (OTCMKTS:CEGMF) vs. Rio Tinto (OTCMKTS:RIO)
Cerro Grande Mining (OTCMKTS:CEGMF) and Rio Tinto (NYSE:RIO) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.
Institutional and Insider Ownership
8.6% of Rio Tinto shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Rio Tinto pays an annual dividend of $3.02 per share and has a dividend yield of 6.2%. Cerro Grande Mining does not pay a dividend. Rio Tinto pays out 59.6% of its earnings in the form of a dividend. Rio Tinto has increased its dividend for 2 consecutive years.
Earnings & Valuation
This table compares Cerro Grande Mining and Rio Tinto’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cerro Grande Mining||$3.33 million||0.31||-$1.16 million||N/A||N/A|
|Rio Tinto||$40.52 billion||1.53||$13.64 billion||$5.07||9.63|
Rio Tinto has higher revenue and earnings than Cerro Grande Mining.
This is a summary of recent ratings for Cerro Grande Mining and Rio Tinto, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cerro Grande Mining||0||0||0||0||N/A|
Rio Tinto has a consensus target price of $55.66, indicating a potential upside of 14.00%. Given Rio Tinto’s higher possible upside, analysts plainly believe Rio Tinto is more favorable than Cerro Grande Mining.
This table compares Cerro Grande Mining and Rio Tinto’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cerro Grande Mining||N/A||N/A||-155.53%|
Volatility and Risk
Cerro Grande Mining has a beta of 19.33, meaning that its share price is 1,833% more volatile than the S&P 500. Comparatively, Rio Tinto has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.
Rio Tinto beats Cerro Grande Mining on 9 of the 11 factors compared between the two stocks.
About Cerro Grande Mining
Cerro Grande Mining Corporation engages in the acquisition, exploration, and development of mineral properties in Chile. The company primarily explores for gold, silver, copper, and limestone deposits. Its primary property is the Pimenton Mine that covers an area of 3,121 hectares located in the high mountain range of Chile. The company was formerly known as South American Gold and Copper Company Limited and changed its name to Cerro Grande Mining Corporation in March 2011. Cerro Grande Mining Corporation was founded in 1990 and is based in Providencia, Chile.
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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