Rio Tinto Group (NYSE:RIO) & Jaguar Mining (OTCMKTS:JAGGD) Head-To-Head Review

Jaguar Mining (OTCMKTS:JAGGD) and Rio Tinto Group (NYSE:RIO) are both basic materials companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for Jaguar Mining and Rio Tinto Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jaguar Mining	0	0	0	0	0.00
Rio Tinto Group	0	4	5	3	2.92

Rio Tinto Group has a consensus target price of $73.00, suggesting a potential upside of 21.97%. Given Rio Tinto Group’s stronger consensus rating and higher probable upside, analysts plainly believe Rio Tinto Group is more favorable than Jaguar Mining.

Profitability

This table compares Jaguar Mining and Rio Tinto Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jaguar Mining	28.17%	26.75%	17.80%
Rio Tinto Group	N/A	N/A	N/A

Insider & Institutional Ownership

19.3% of Rio Tinto Group shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Jaguar Mining and Rio Tinto Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jaguar Mining	$97.23 million	1.67	-$150,000.00	$0.50	4.48
Rio Tinto Group	$53.66 billion	1.40	$10.06 billion	$6.45	9.28

Rio Tinto Group has higher revenue and earnings than Jaguar Mining. Jaguar Mining is trading at a lower price-to-earnings ratio than Rio Tinto Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Jaguar Mining pays an annual dividend of $0.25 per share and has a dividend yield of 10.9%. Rio Tinto Group pays an annual dividend of $4.46 per share and has a dividend yield of 7.5%. Jaguar Mining pays out 49.0% of its earnings in the form of a dividend. Rio Tinto Group pays out 69.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Jaguar Mining is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Jaguar Mining has a beta of 2.75, suggesting that its share price is 175% more volatile than the S&P 500. Comparatively, Rio Tinto Group has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Summary

Rio Tinto Group beats Jaguar Mining on 9 of the 16 factors compared between the two stocks.

About Jaguar Mining

Jaguar Mining, Inc. engages in the acquisition, exploration, development and operation of gold producing properties in Brazil. Its mining operations include Turmalina, Paciência and Caeté. The firm is also developing the Grurupi Project and exploring the Iron Quadrangle and Pedra Branca Project. The company was founded by Daniel R. Titcomb in 1984 and is headquartered Toronto, Canada.

About Rio Tinto Group

Rio Tinto Group engages in exploring, mining, and processing mineral resources worldwide. The company operates through Iron Ore, Aluminium, Copper, and Minerals Segments. The Iron Ore segment engages in the iron ore mining, and salt and gypsum production in Western Australia. The Aluminum segment is involved in bauxite mining; alumina refining; and aluminium smelting. The Copper segment engages in mining and refining of copper, gold, silver, molybdenum, and other by-products and exploration activities. The Minerals segment is involved in mining and processing of borates, titanium dioxide feedstock, and iron concentrate and pellets; diamond mining, sorting, and marketing; and development projects for battery materials, such as lithium. It also owns and operates open pit and underground mines; and refineries, smelters, processing plants and power, and shipping facilities. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom.