RIO vs CAT vs CMI vs RS

For growth investors, Caterpillar Inc.

(CAT) is the stronger pick with 4. 3% revenue growth year-over-year, versus -1. 3% for Cummins Inc. (CMI). Rio Tinto Group (RIO) offers the better valuation at 14. 2x trailing P/E (12. 3x forward), making it the more compelling value choice. Analysts rate Caterpillar Inc. (CAT) a "Buy" — based on 53 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Rio Tinto Group (RIO) is the cheapest at 14.

2x versus Caterpillar Inc. at 48. 0x. On forward P/E, Rio Tinto Group is actually cheaper at 12. 3x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Reliance Steel & Aluminum Co. wins at 0. 96x versus Cummins Inc. 's 2. 27x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Caterpillar Inc.

(CAT) delivered a total return of +291. 3%, compared to +41. 8% for Rio Tinto Group (RIO). Over 10 years, the gap is even starker: CAT returned +1203% versus RIO's +386. 2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Reliance Steel & Aluminum Co.

(RS) is the lower-risk stock at 0. 75β versus Cummins Inc. 's 1. 57β — meaning CMI is approximately 110% more volatile than RS relative to the S&P 500. On balance sheet safety, Rio Tinto Group (RIO) carries a lower debt/equity ratio of 24% versus 2% for Caterpillar Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Caterpillar Inc.

(CAT) is pulling ahead at 4. 3% versus -1. 3% for Cummins Inc. (CMI). On earnings-per-share growth, the picture is similar: Rio Tinto Group grew EPS 14. 8% year-over-year, compared to -27. 7% for Cummins Inc.. Over a 3-year CAGR, CMI leads at 6. 2% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Rio Tinto Group (RIO) is the more profitable company, earning 21.

5% net margin versus 5. 2% for Reliance Steel & Aluminum Co. — meaning it keeps 21. 5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: RIO leads at 29. 2% versus 7. 2% for RS. At the gross margin level — before operating expenses — RIO leads at 56. 4%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Reliance Steel & Aluminum Co. (RS) is the more undervalued stock at a PEG of 0. 96x versus Cummins Inc. 's 2. 27x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Rio Tinto Group (RIO) trades at 12. 3x forward P/E versus 39. 2x for Caterpillar Inc. — 26. 9x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for RIO: 1. 2% to $101. 75.

All stocks in this comparison pay dividends.

Rio Tinto Group (RIO) offers the highest yield at 4. 3%, versus 0. 6% for Caterpillar Inc. (CAT).

For long-horizon retirement investors, Reliance Steel & Aluminum Co.

(RS) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 75), 1. 3% yield, +450. 7% 10Y return). Cummins Inc. (CMI) carries a higher beta of 1. 57 — meaning larger drawdowns in market downturns, which matters significantly when you cannot wait years for a recovery. Both have compounded well over 10 years (RS: +450. 7%, CMI: +542. 4%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

These companies operate in different sectors (RIO (Basic Materials) and CAT (Industrials) and CMI (Industrials) and RS (Basic Materials)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

In terms of investment character: RIO is a large-cap deep-value stock; CAT is a large-cap quality compounder stock; CMI is a mid-cap quality compounder stock; RS is a mid-cap quality compounder stock. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.