6 months ago
Why Rio Tinto Is Better Than South32, BHP Billiton
RBC Capital Markets has run the numbers on Australia's three big miners after their June quarter production reports and declared Rio Tinto (RIO.AU) (RIO) the stock to own. Analyst Paul Hissey says South32 (S32.AU) is his second favored stock, followed by BHP Billiton (BHP.AU) (BHP), after comparing the trio on a bunch of metrics including growth, returns, margins and valuations. Here's why Rio Tinto comes out ahead: Our preference remains with RIO (Outperform), driven not only by the slight advantage on the balance sheet (over BHP), but by both fundamental and relative discount to its major peer, as well as our forecast of an aggressive interim dividend (including US$1bn special) given an overall greater degree of latitude in putting excess capital to use.