Rio Tinto PLC (NYSE: RIO) and Dorchester Minerals, L.P. (NASDAQ:DMLP) are both basic materials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Profitability

This table compares Rio Tinto PLC and Dorchester Minerals, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rio Tinto PLC N/A N/A N/A
Dorchester Minerals, L.P. 65.28% 41.71% 41.15%

Valuation & Earnings

This table compares Rio Tinto PLC and Dorchester Minerals, L.P.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rio Tinto PLC $37.60 billion 2.30 $15.22 billion N/A N/A
Dorchester Minerals, L.P. $45.34 million 10.43 $38.15 million $0.95 15.42

Rio Tinto PLC has higher revenue and earnings than Dorchester Minerals, L.P..

Analyst Ratings

This is a summary of current ratings for Rio Tinto PLC and Dorchester Minerals, L.P., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rio Tinto PLC 1 3 14 0 2.72
Dorchester Minerals, L.P. 0 0 0 0 N/A

Rio Tinto PLC presently has a consensus target price of $47.67, suggesting a potential downside of 1.19%. Given Rio Tinto PLC’s higher possible upside, equities research analysts plainly believe Rio Tinto PLC is more favorable than Dorchester Minerals, L.P..

Institutional and Insider Ownership

6.9% of Rio Tinto PLC shares are owned by institutional investors. Comparatively, 13.3% of Dorchester Minerals, L.P. shares are owned by institutional investors. 9.2% of Dorchester Minerals, L.P. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

Rio Tinto PLC has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Dorchester Minerals, L.P. has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Dividends

Rio Tinto PLC pays an annual dividend of $2.37 per share and has a dividend yield of 4.9%. Dorchester Minerals, L.P. pays an annual dividend of $1.29 per share and has a dividend yield of 8.8%. Dorchester Minerals, L.P. pays out 135.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Dorchester Minerals, L.P. beats Rio Tinto PLC on 7 of the 13 factors compared between the two stocks.

Rio Tinto PLC Company Profile

Rio Tinto plc is a mining and metals company. The Company’s business is finding, mining and processing mineral resources. The Company’s segments include Iron Ore, Aluminium, Copper & Diamonds, Energy & Minerals and Other Operations. The Company operates an iron ore business, supplying the global seaborne iron ore trade. Its Iron Ore product operations are located in the Pilbara region of Western Australia. The Aluminium business includes bauxite mines, alumina refineries and aluminum smelters. Its bauxite mines are located in Australia, Brazil and Guinea. The Copper & Diamonds segment has managed operations in Australia, Canada, Mongolia and the United States, and non-managed operations in Chile and Indonesia. The Energy & Minerals segment consists of mining, refining and marketing operations in over 10 countries, across six sectors: borates, coal, iron ore concentrate and pellets, salt, titanium dioxide and uranium.

Dorchester Minerals, L.P. Company Profile

Dorchester Minerals, L.P. is a limited partnership company. The Company is engaged in the acquisition, ownership and administration of Royalty Properties and net profits interests (NPIs). As of December 31, 2016, the Royalty Properties consisted of producing and nonproducing mineral, royalty, overriding royalty, net profits and leasehold interests located in 574 counties and parishes in 25 states. The NPIs represent net profits overriding royalty interests in various properties owned by the Company. As of December 31, 2016, the Company had completed 270 wells on its Royalty Properties in seven states, and 39 new wells completed on its Properties in three states. The Company owns both a royalty interest and a net profits interest. The Company’s general partner is Dorchester Minerals Management LP.

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