Contrasting Rio Tinto (NYSE:RIO) & Pelangio Exploration (NYSE:PGXPF)

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Rio Tinto (NYSE:RIO) and Pelangio Exploration (OTCMKTS:PGXPF) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Dividends

Rio Tinto pays an annual dividend of $3.02 per share and has a dividend yield of 5.5%. Pelangio Exploration does not pay a dividend. Rio Tinto pays out 59.6% of its earnings in the form of a dividend.

Risk & Volatility

Rio Tinto has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, Pelangio Exploration has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500.

Valuation & Earnings

This table compares Rio Tinto and Pelangio Exploration’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rio Tinto $40.52 billion 1.73 $13.64 billion $5.07 10.88
Pelangio Exploration N/A N/A -$1.06 million N/A N/A

Rio Tinto has higher revenue and earnings than Pelangio Exploration.

Analyst Ratings

This is a summary of current ratings for Rio Tinto and Pelangio Exploration, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto 5 11 7 0 2.09
Pelangio Exploration 0 0 0 0 N/A

Rio Tinto currently has a consensus price target of $1,067.08, suggesting a potential upside of 1,834.86%. Given Rio Tinto’s higher possible upside, equities research analysts clearly believe Rio Tinto is more favorable than Pelangio Exploration.

Profitability

This table compares Rio Tinto and Pelangio Exploration’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
Pelangio Exploration N/A -278.53% -118.59%

Insider and Institutional Ownership

7.3% 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.

Summary

Rio Tinto beats Pelangio Exploration on 9 of the 10 factors compared between the two stocks.

Rio Tinto Company Profile

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.

Pelangio Exploration Company Profile

Pelangio Exploration, Inc. is a junior gold exploration company, which engages in the acquisition and exploration of early stage or undervalued exploration prospects located in world-class gold belts. Its projects include Obuasi, Manfo, and Akroma properties in Ghana; Birch Lake and Poirier Gold properties in Canada. The company was founded on February 27, 2008 and is headquartered in Toronto, Canada.

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