ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Rio Tinto's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2025 was 11.14%.
As of today (2026-06-26), Rio Tinto's WACC % is 10.54%. Rio Tinto's ROIC % is 10.37% (calculated using TTM income statement data).
Rio Tinto earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Rio Tinto (OTCPK:RTPPF) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Rio Tinto's WACC % is 10.54%. Rio Tinto's ROIC % is 10.37% (calculated using TTM income statement data).
Rio Tinto earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Rio Tinto ROIC % Related Terms
Rio Tinto ROIC % Historical Data
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The historical data trend for Rio Tinto's ROIC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Other Industrial Metals & Mining subindustry, Rio Tinto's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Rio Tinto ROIC % vs Metals & Mining Industry
For the Metals & Mining industry and Basic Materials sector, Rio Tinto's ROIC % distribution charts can be found below:
* The bar in red indicates where Rio Tinto's ROIC % falls into.
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2025) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Rio Tinto (RTPPF) has a ROIC % of 11.14% as of Dec. 2025. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Rio Tinto and its competitors.
Is Rio Tinto's ROIC % too high?
Rio Tinto's current ROIC % is 11.14%. Overall, Rio Tinto has a GF Score™ of 73/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Rio Tinto's ROIC % compare to competitors?
Rio Tinto's ROIC % of 11.14% can be compared against companies in the Metals & Mining industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Metals & Mining company?
A good ROIC % depends on the Metals & Mining industry context. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Rio Tinto and its competitors. Rio Tinto's current ROIC % is 11.14%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rio Tinto stock overvalued right now?
Based on GuruFocus' analysis, Rio Tinto (RTPPF) is currently considered Significantly Overvalued. The stock's GF Value™ is $69.22, compared to a current price of $94.32 — trading 36.3% above its estimated fair value. The current ROIC % is 11.14%. Rio Tinto's overall GF Score™ is 73/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Rio Tinto (RTPPF), the current ROIC % is 11.14% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Rio Tinto (RTPPF) Overvalued in 2026?
Based on GuruFocus' analysis, Rio Tinto stock appears to be overvalued.
The current stock price of $94.32 is trading 36.3% above its estimated GF Value™ of $69.22.
GuruFocus considers Rio Tinto to be Significantly Overvalued.
Key valuation signals for RTPPF:
ROIC %: 11.14%
GF Value™: $69.22 vs. price of $94.32 (36.3% above fair value)
No single metric tells the full story. See the RTPPF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rio Tinto is a global diversified miner. Iron ore is its major commodity, with lesser contributions from copper and aluminum. Lithium, diamonds, gold, and industrial minerals are more minor contributors. The 1995 merger of RTZ and CRA, via a dual-listed structure, created the present-day company. The two operate as a single business entity, with shareholders in each company having equivalent economic and voting rights. Major assets included the Pilbara iron ore operations, a 30% stake in the Escondida copper mine, 66%-ownership of the Oyu Tolgoi copper mine in Mongolia, the Weipa and Gove bauxite mines in Australia, and six hydro-powered aluminum smelters in Canada.
73GF Score
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