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Opinions David Burrows
Rio TintoRIOTOP PICKAug 16, 2017
David BurrowsStock price when the opinion was issued
As of Jun 11, 2026. Market Open.
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Premium contentOur PAST TOP PICK with RIO has triggered its stop at $90. To remain disciplined, we recommend covering the position at this time. We combined with previous guidance, this will result in a net investment gain of 39%.
Copper, aluminum, iron ore. AI data centres and electrification will be huge drivers. Growth rate of data centres is off the charts, and the "picks and shovels" will benefit from that capex spending. Onshoring and nearshoring are increasing. Lots of long-life resource deposits.
HQ is in the UK. Mining is around the world, with a lot in Australia. Yield is 5.53%.
Stan WongPremium contentPremium contentHard to comment on rumours of takeovers. So let's go back to looking at the chart -- was in a longer-term downtrend, but broke out in middle of last year and has now broken out to new highs. Took out high from late 2023 and it's still going. Copper hit a new all-time high this week.
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Background premise is that we've entered a structural bull market for commodity prices. For 15 years, no one invested in new capacity and so there's scarcity. The most important thing we're hedging against is inflation. For a metals producer, as costs go up they put their prices up.
Global dynamo, going through its own catalyst transition toward energy-transition metals like copper, lithium, and aluminum. Those things have fairly inelastic demand, given the growth in demand. If earnings double, then the multiple can double, and dividends can double. That adds up to a lot. History of paying large special dividends. Well diversified. Technically, looks very strong having broken out of a multi-year base. Yield is 3.79%.
David BurrowsPremium contentLikes materials, likes copper. Significant iron ore component (close to 60%), and iron ore hasn't been as strong. Asia is getting better, and China is strengthening. So that's positive. Long-term chart is very attractive. Trading below 200-week MA, he'd like to see it break out; if it can trade north of $65, thinks it would. Solid dividends and special dividends. Big cashflow. Might be just a bit early.
See his Top Picks.
Premium contentOffering diversification globally into materials such as iron ore, aluminum, copper and lithium, we reiterate RIO as a TOP PICK. Analysts expect their copper production will grow over 30% over the next 3 years. It trades at 10x earnings, under 2x book and supports a ROE of 20%. The robust dividend is backed by a payout ratio under 60% of cash flow. We continue to recommend a stop at $58, looking to achieve $81 — upside over 25%. Yield 5.9%
(Analysts’ price target is $81.13)
Recently, over the last few weeks, the US Economic Surprise data has started to improve. There have been lots of great economic reports from around the world over the last few weeks. Japan is growing at over 4% for the 1st time in 20 years. He wants to have exposure to that. Basic materials area is an area that has been in favour since 2011. This company is one of the biggest producers of copper, iron ore, met coal and other commodities around the world. They do not hedge their production, so if prices go up, they benefit. Really prudently managed. Almost no debt. Dividend yield of 6.3%. (Analysts’ price target is $52.66.)