Rio Tinto is one of the largest mining companies in the world and the stock offers attractive dividend yields. However, mining stocks are often less known due to its complexity. Hence, I have written this article to provide a comprehensive analysis of Rio Tinto and whether this stock is a good investment.
The article will be split into two segments. The first segment of this article would be focused on understanding the business of Rio Tinto and mining in general. The second segment would be focused on analysing the financials and the risks of investing in Rio Tinto stock.
1. Business Model of Mining Companies
The simplified version of what mining companies do is to dig up whatever resources underneath the earth’s surface and sell it.
However, the entire process of digging up resources and selling it often takes up to years or even