THE LEAD
The Ultimate Commodity Leader for Commodity Expansion Rio Tinto provides ideal variety. The materials sector makes up only 2.8 percent of the S&P 500 index, and the metals and mining subsector makes up only 0.3 percent. In 2021, the company generated $25 billion in cash flow, compared to $6 billion for Salesforce, which is worth 1.5 times Rio. Technology accounts for 27% of the market in the United States. Rio Tinto is a market leader in iron ore and aluminum, with a top-tier copper growth profile. In the energy revolution, copper could become the "new oil." Metals are extremely important in the global energy shift. Industrial metals provide one of the most significant development prospects in the future decade, with demand anticipated to put a strain on available supplies. Rio Tinto provides growth, income (10%+), and diversification for all investors. Rio offers an incredibly asymmetric risk/reward opportunity, with the stock trading just above a strong 10-year support foundation.
Rio Tinto (NYSE:RIO) maintains a favorable risk/reward rating based on its unique portfolio
diversification benefits, leverage to secular growth patterns, and unusually asymmetric risk/reward profile. Rio has top-tier copper growth potential, industry-leading aluminum profitability, and probably the best iron ore holdings in the world. A nearby technical support base that has evolved over the past 13 years, a discounted valuation, a 10% dividend yield, and a structurally bullish supply and demand balance for industrial metals over the next decade all support the downside. 8 | SKILLINGS MINING REVIEW July 2022
