The Basic Materials group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Rio Tinto (RIO) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? Let's take a closer look at the stock's year-to-date performance to find out.
Rio Tinto is one of 239 individual stocks in the Basic Materials sector. Collectively, these companies sit at #2 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that could be poised to outperform the broader market over the next one to three months. Rio Tinto is currently sporting a Zacks Rank of #2 (Buy).
Over the past 90 days, the Zacks Consensus Estimate for RIO's full-year earnings has moved 1% higher. This signals that analyst sentiment is improving and the stock's earnings outlook is more positive.
Based on the most recent data, RIO has returned 6.7% so far this year. At the same time, Basic Materials stocks have gained an average of 3.3%. As we can see, Rio Tinto is performing better than its sector in the calendar year.
Another stock in the Basic Materials sector, Southern Copper (SCCO), has outperformed the sector so far this year. The stock's year-to-date return is 24.9%.
The consensus estimate for Southern Copper's current year EPS has increased 12.4% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
To break things down more, Rio Tinto belongs to the Mining – Miscellaneous industry, a group that includes 49 individual companies and currently sits at #64 in the Zacks Industry Rank. Stocks in this group have gained about 9.4% so far this year, so RIO is slightly underperforming its industry this group in terms of year-to-date returns.
Southern Copper, however, belongs to the Mining – Non Ferrous industry. Currently, this 13-stock industry is ranked #149. The industry has moved +33.3% so far this year.
Investors with an interest in Basic Materials stocks should continue to track Rio Tinto and Southern Copper. These stocks will be looking to continue their solid performance.
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