3. Rio Tinto ( RIO) is a global metals and mining giant with operations in more than 50 countries.
Rio Tinto will continue to benefit from its iron ore business in the long run, as the business contributes 28% toward total revenues. According to analysts polled by Bloomberg, the company is set to announce earnings of $7.03 per share for 2010 and $8.79 per share for 2011, a remarkable improvement from $2.76 per share reported in 2009. At $70.8, the stock is currently trading at an attractive price-to-earnings multiple of 9.6. In comparison, mining giants BHP Billiton ( BHP), Vale ( VALE), Alcoa ( AA), Freeport-McMoRan Copper & Gold ( FCX), and Teck Resources ( TCK) are trading at PE multiples of 12.4, 11.0, 28.9, 14.0, and 19.5, respectively. All four analysts following Rio recommend buying the stock. Analysts expect the stock to gain 37% during 2011 with a consensus 12-month target price of $97.2. In comparison, BHP Billiton and Vale have upsides of 6% and 18%, respectively.