10 Best Lithium and Battery Stocks to Buy Now

2. Rio Tinto Group (NYSE:RIO)

Number of hedge fund investors: 37

Rio Tinto Group (NYSE:RIO) has its foot in 35 countries to consolidate its place in the minerals mining market, focusing on critical minerals like copper, aluminum, iron ore, and lithium.

The popularity of the stock has grown in the last 6 months; as of 31 December 2023, 34 hedge fund investors had held a stake in the stock; however, as of 31 March 2024, the number of hedge fund investors has increased to 37! Furthermore, the analysts have set hopes high for the stock, as they see the stock realizing an upside potential of 24.6%, rising from its current price of $65.8 to a price target of $82.

Although lower prices of aluminum and other minerals resulted in a decrease in its full-year 2023 underlying earnings from $13.4 billion in 2022 to $11.8 billion, the company ended up declaring a final dividend of 258 cents per share, which was more than the analysts’ estimate. Below you can see what the company’s CFO had to say about their full-year performance:

“There is significant value remaining to be unlocked from our existing assets. On a net-net basis, our underlying EBITDA declined 9% to $23.9 billion. Cash flow from operations remained strong at $15.2 billion, but we do need to bring down inventory. Free cash flow was $7.7 billion after capital expenditure of $7.1 billion. Following dividends paid and funding of the Matalco transaction for just over $700 million, we ended the year with net debt of $4.2 billion, virtually unchanged from 2022. Overall, we delivered a healthy return on capital employed of 20% on underlying earnings of $11.8 billion. This underpinned our decision to continue our eight-year record of declaring a 60% payout on the ordinary dividend, equating to $7.1 billion.”