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S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast (Ad)
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast (Ad)
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast (Ad)
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast (Ad)
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law
S&P 500   3,585.62
DOW   28,725.51
QQQ   267.26
Want to Increase Your Conversion Rates? This Is the Biggest Threat to Your Success.
Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast (Ad)
Russia accused of 'kidnapping' head of Ukraine nuclear plant
EU chief: New Greece-Bulgaria gas pipeline 'means freedom'
Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast (Ad)
Danish Energy Agency says Nord Stream 2 gas pipeline under Baltic Sea appears to have stopped leaking gas
UK train strikes and energy hikes add to a week of turmoil
Tailor an Options Trading Strategy to Fit Your Needs (Ad)pixel
Russia blindfolds, detains Ukraine nuclear plant chief
NIH to fund unproven ALS drugs under patient-backed law

Miners Advance On Earnings Despite Broader Economic Challenges

Miners Advance On Earnings Despite Broader Economic ChallengesMetal miner Rio Tinto (NYSE: RIO) is up 7.8% since reporting first-half earnings in late July. Earnings declined 29%, to $2.73 per share, while revenue dropped 10% to $14.9 billion. 

Although that was actually an earnings beat, the company also slashed its dividend in response to lower iron ore price on reduced orders from China, its largest customer. In addition, Rio Tinto cited difficulty finding workers, along with supply-chain challenges and inflation, as reasons for the smaller dividend. 

The earnings decline was due to lower sale prices for iron ore. While the company was able to fetch higher prices for aluminum and minerals, higher operating costs offset those increases. 

Despite mixed signals regarding the health of the company and the mining industry as a whole, analysts are maintaining a “hold” rating on the stock, according to MarketBeat analyst data. The price target is $78, which would be an upside of 27.91%.

On Monday, Turquoise Hill Resources (NYSE: TRQ) rejected Rio Tinto’s offer to purchase a 49% stake in the gold and copper miner. Rio Tinto is already the majority shareholder in Turquoise Hill. Rio Tinto made the offer in March, with the hope of directly owning Turquoise Hill’s enormous Oyu Tolgoi copper-gold mine in Mongolia. 

Rio Tinto is currently trading 23% below its April 18 high of $79.61. However, it’s rallied 3.76% in the past week and 14.86% in the past month. Trading volume was 17% heavier than normal for the week ended August 12, indicating institutional buying. 
Miners Advance On Earnings Despite Broader Economic Challenges


Strong Fiscal Management

Meanwhile, Australian mining giant BHP Group (NYSE: BHP) gapped 5.9% higher Tuesday, following the company’s report of full-year results for fiscal 2022. Wall Street was clearly pleased with the strong fiscal management at the company. 

In addition to earning $8.42 per share, a year-over-year increase of It generated record free cash flows of $24.3 billion.

BHP, whose lines of business include petroleum, copper, iron ore and coal, currently pays a dividend of $6 per share, for a dividend yield of 10.35%. That’s well above the averages for mining companies, as well as NYSE stocks as a whole, according to MarketBeat dividend data

In its earnings report, BHP shared that profit from continuing operations grew 34% from a year ago. Free cash flow was $24.3 billion, and the company also cut its debt load.

In a statement, CEO Mike Henry issued a global forecast for events likely to affect the company’s business. 

“We expect China to emerge as a source of stability for commodity demand in the year ahead, with policy support progressively taking hold,” he said. “At the same time, we expect to see a slowdown in advanced economies as monetary policy tightens, as well as ongoing geopolitical uncertainty and inflationary pressures. The direct and indirect impacts of Europe’s energy crisis are a particular point of concern. Tight labor markets will remain a challenge for global and local supply chains. Waves of COVID-19 infection continue to occur in the communities where we operate, and we are planning accordingly.”
Miners Advance On Earnings Despite Broader Economic Challenges

Industry-Wide Price Boost

As a whole, the mining sub-industry has gotten a boost in the past week, following numerous earnings reports by prominent large caps.

For example, Brazilian mining giant Vale (NYSE: VALE) also reported earnings in late July, and the stock is up 1.5% since then. Earnings fell 11%, to $1.32 per share, on revenue of $11.2 billion, a decline of 32%.

Nonetheless, the company announced a $3 billion shareholder payout, slated for September. That’s in addition to an earlier buyback program totaling $8.3 billion. 

Other good news surrounded the company’s iron ore production, which is recovering from a dam disaster in Brazil that killed 270 people and caused widespread ecological damage. However, this week Brazilian authorities issued a $17 million fine against the company. In the big scheme of things, that fine is unlikely to cause much financial harm to Vale or its shareholders. 

The miners are certainly flashing mixed messages when it comes to their fundamental strength. At this juncture, despite recent post-earnings uptrends, global uncertainty remains a risk to these stocks, even as a tenuous market rally remains in place.
Miners Advance On Earnings Despite Broader Economic Challenges

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Rio Tinto Group (RIO)
1.5572 of 5 stars
$55.06-0.2%9.68%N/AHold$70.00
BHP Group (BHP)
1.8519 of 5 stars
$50.04-0.8%13.93%N/AHold$65.10
Vale (VALE)
2.4514 of 5 stars
$13.32+5.2%5.86%3.26Hold$17.23
Turquoise Hill Resources (TRQ)
2.0407 of 5 stars
$29.57-1.0%N/A10.83Moderate Buy$35.14
Compare These Stocks  Add These Stocks to My Watchlist 

Should you invest $1,000 in Rio Tinto Group right now?

Before you consider Rio Tinto Group, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Rio Tinto Group wasn't on the list.

While Rio Tinto Group currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Kate Stalter

About Kate Stalter

Contributing Author: Retirement, Asset Allocation, and Tax Strategies

Kate Stalter is a Series 65-licensed asset manager, with more than two decades of experience in various areas of financial services. As an investment advisor and financial planner, Kate personally manages client portfolios, with a focus on successful retirement, including asset allocation, income generation and tax strategies. Kate also serves as a capital-markets contributor at Forbes.com, and is an expert columnist for the investment advisory channel at U.S. News & World Report.
Contact Kate Stalter via email at stalterkate@gmail.com.
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