Should you buy Rio Tinto Limited today?

Shares in Rio Tinto Limited (ASX: RIO) have jumped 1.8% today on the back of solid half-year production results released yesterday.

The announcement showed copper sales and iron ore shipments were 23% and 20% higher, respectively, compared to the previous corresponding period in 2013, whilst coal, aluminium and bauxite put in similar performances to the previous year.

It’s fair to say that analysts and investors alike would’ve been impressed by yesterday’s result. However Rio still faces the prospect of lower iron ore prices in the near term and uncertainty surrounding whether, or not, it’ll announce more writeoffs, when it releases its half-year report next month.

Given Rio Tinto has the lowest cost of production of any iron ore miner and boasts diversified operations, it will be more sheltered from the looming iron ore price falls. The trick for Rio will be its restructuring, cost cutting and divestments in divisions outside of iron ore such as Energy and Aluminium.

To buy, or not?

There’s a chance Rio’s shares could be a bargain at today’s prices in the long term. Whilst I’m not committing to a buy just yet, I’m eagerly awaiting the release of its results on August 7 to understand what management have done to counteract lower iron ore prices.

Until then however, you won't find me sitting on my hands and waiting. I'm busy finding other great stock ideas and I think I've found one with a 7% grossed-up dividend yield. Motley Fool investment advisor, Scott Phillips recently gave it his tick of approval but BEST of all: You can now get its name and code free! Just click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies. 

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