Rio & Anglo American (AAL): 2 mining behemoths to buy at a discount today

Highlights 

  • Rio Tinto’s consolidated sales revenue stood at US$33,083 million in H1 2021, up by 71% year-on-year compared to US$19,362 million in H1 2020.
  • Anglo American’s De Beers' production of rough diamond rose by 37% year-on-year to 15.4 million carats (30 June 2020: 11.3 million carats) due to a strong recovery in consumer demand post-COVID.

The metals and mining industry is a key indicator of the performance of the economy. High demand for metals and mining products boosts prices. The mining industry is cyclical, and thus the COVID-19 pandemic had a profound impact on the industry’s activities and operations. The prices of mining stocks fluctuated in direct correlation with the severity of the crisis.  With the reopening of the economy and resumption of mining operations, mining stocks are luring investors once again.

Rio Tinto & Anglo American: Details of dividend payout

(Data source: Company release)

Let us take a detailed look at two FTSE 100 listed mining stocks trading at a discount today.

Rio Tinto Plc (LON: RIO)

Rio Tinto is engaged in exploring, mining, and processing minerals such as gold, diamonds, copper, iron ore and uranium. In the last week of August 2021, Rio Tinto restarted operations at the Richards Bay Minerals located in South Africa, following the stabilisation of the security situation in the vicinity of the mine. In July, it committed $2.4 billion funding for the Serbia-based Jadar lithium-borates project.

The shares of Rio Tinto are trading at GBX 4,864.50, down by 2.90% at 11:42 AM BST on 17 September 2021. The market cap of the company currently stands at £62,519.12 million.

Rio Tinto’s consolidated sales revenue stood at US$33,083 million in H1 2021, up by 71% year-on-year compared to US$19,362 million in H1 2020. It recorded net cash of US$3.1 billion as of 30 June 2021.

Shareholders of Rio Tinto Plc will be paid an interim dividend of 270.84 pence per ordinary share, and a special dividend of 133.26 pence per ordinary share for the half-year ended 30 June 2021. The interim and special dividends will be paid to shareholders on 23 September 2021.

Anglo American Plc (LON: AAL)

Anglo American is an international mining group focusing on diamonds, copper, platinum, iron ore, etc. Its De Beers' production of rough diamond rose by 37% year-on-year to 15.4 million carats (30 June 2020: 11.3 million carats) due to a strong recovery in consumer demand post-COVID.

The shares of Anglo American are trading at GBX 2,686.50, down by 4.51% at 12:00 PM BST on 17 September 2021. The market cap of the company currently stands at £38,286.72 million.

For the half-year ended 30 June 2021, Anglo American recorded an EBITDA of US$12.1 billion and revenue of US$21,779 million, representing a year-on-year increase of 262% and 114%, respectively.

Anglo American’s qualified shareholders will get a dividend of 182.113 pence per share on 24 September 2021.

Conclusion

Investors are usually drawn towards FTSE 100 mining stocks due to their higher returns. However, investors must carefully analyse trends within the broader industry before investing, as the performance of these stocks is directly dependent on macroeconomic conditions.

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