African Rainbow Minerals (ARI.JO)

Materials · JSE · South Africa

R171.05-13.25% today

Fundamentals

Market capR34.95B

P/E ratio25.8

Dividend yield6.46%

Revenue growth (YoY)+2.3%

Profit margin9.3%

Return on equity3.4%

52-week rangeR163.10 to R276.68

Valuation and ratings

DCF fair valueR259.49

Upside to fair value+51.7%

Analyst target (mean)R240.60

Analyst rangeR200.00 to R290.00

Analysts covering5

Consensus viewbuy

Moat score35/100

Overall rating59/100, Buy

African Rainbow Minerals trades at R171.05, which is 52% below the R259.49 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 35 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 25.8 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About African Rainbow Minerals

African Rainbow Minerals Limited, through its subsidiaries, operates as a diversified mining and minerals company in South Africa, Malaysia, and Switzerland. It explores for platinum group metals, nickel, coal, iron ore, copper, manganese ore, and chrome, as well as gold deposits. African Rainbow Minerals Limited was incorporated in 1933 and is based in Sandton, South Africa.

Industry: Other Industrial Metals & MiningHQ: South Africa

ARI.JO passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow

Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.

Dividend powerhouses

Yields above 3%, filtered for the one thing yield screens never check: whether the company can actually afford it.

Low volatility defensives

Companies that move less than the market and pay you to wait. The holdings that let you sleep, and let you hold everything else.

Mining and materials

Price takers in a violent cycle, with balance sheets that decide whether they survive the bottom of it.

South Africa and the JSE

A commodity and currency market wearing an equity market's clothes. The index can rise on a good day in Beijing.

Dividend aristocrats

Companies with long, unbroken records of raising their dividend. The record is the point: it is evidence, not a promise.

Common questions

Is African Rainbow Minerals (ARI.JO) undervalued?

Against our discounted cash flow estimate of R259.49, ARI.JO at R171.05 is 52% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is ARI.JO's P/E ratio?

ARI.JO trades at 25.8 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

The full research page for ARI.JO, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.

Open ARI.JO in the app Free guides and screens

Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.