7 Best Zinc Stocks to Buy According to Hedge Funds

3. Rio Tinto Group (NYSE:RIO)

Number of Hedge Fund Holders: 39

Rio Tinto Group (NYSE:RIO) is a renowned mining company with operations spanning iron ore, aluminum, copper, and minerals. Although zinc makes up a lesser share of its portfolio, the company produces it as a by-product at its Kennecott Utah Copper operations, continuing its involvement in the base metals market. As the need for zinc increases in infrastructure and decarbonization technologies, Rio Tinto’s output remains important to the industry.

Rio Tinto Group (NYSE:RIO) reported a 15% increase in net profit, reaching $11.55 billion in 2024, up from $10.06 billion in 2023. However, underlying EBITDA declined by 2% to $23.3 billion, with the main cause being an 11% drop in iron ore prices due to lower Chinese steel demand and increased supply from competitors. Despite these obstacles, the company generated a 3% increase in operating cash flow, supported by elevated copper and aluminum prices and cost efficiencies.

Furthermore, capital expenditures increased to $9.5 billion as Rio Tinto Group (NYSE:RIO) progressed with major projects like the enhancement of its copper resources to satisfy the growing need for electrification. The company upheld a 60% payout ratio, allocating $6.5 billion in dividends to shareholders.

A key development in 2025 was Mitsui & Co.’s agreement, under which the company acquired a 40% stake for $5.34 billion in Rio Tinto’s Rhodes Ridge iron ore project in Western Australia. This initiative is projected to start production by 2030 and tap into 6.8 billion metric tons of iron ore reserves. It initially aims to produce 16 million tons of iron ore each year, with the possibility of increasing to more than 40 million tons.

Moreover, Rio Tinto Group (NYSE:RIO) is also advancing lower-carbon zinc production by enhancing smelting efficiency and reducing emissions, promoting industrial sustainability. These initiatives place the organization in a favorable position to gain from the rising need for responsibly sourced metals.

However, challenges like iron ore price volatility, operational disruptions in the Pilbara region due to adverse weather, and potential pressure on aluminum margins from trade policies persist. Nonetheless, Rio Tinto Group (NYSE:RIO)’s diversified portfolio, cost-effectiveness, and strategic investments boost its position as a top zinc stock for investors.