Freeport-McMoRan Inc. (FCX) and Rio Tinto plc (RIO) are two natural resource companies with portfolios of mineral assets, as well as oil and natural gas resources. Both engage in producing iron ore, iron ore pellets and nickel.  

Shares of both firms have done well on a year-to-date basis, but both have suffered amid the recent slump in commodity prices. Freeport stock closed Friday at $11.05, up 2.98%. The shares have risen 63% year to date, including a 10% decline over the past three months. Rio Tinto stock closed Friday at $33.93, down 1.82%. The shares have risen 16.5% year to date, including a 3% gain over the past three months. These measures compare with the 2% year-to-date rise in the S&P 500 (SPX) index.

From a valuation perspective, Freeport stock is priced at 9.6 times forward earnings estimates of $1.14 per share. Rio Tinto shares are priced at a forward P/E ratio of 12, which is based on earnings estimates of $2.77 per share. These measures compare with the S&P 500 index's forward P/E of 17.

For the quarter that ends December, Wall Street expects Freeport to deliver earnings per share of 23 cents, up from a 2-cent loss a year ago, while revenue of $4.15 billion would mark a rise of 9.3% year over year. The full-year revenue forecast of $15.08 billion implies a decline of 5% year over year. Rio Tinto reports annually. The company is expected to earn $2.31 per share, which implies a decline of 7% year over year, while the full-year revenue forecast of $34.34 billion would mark a decline of 1.4% year over year.

In terms of execution and management, in its last four reporting periods, Freeport has missed analysts' earnings estimates twice and beaten forecasts twice. In its most recent quarter, it missed Wall Street's estimates for earnings per share by 6 cents but beat on revenue, which grew 14.8% year over year by $70 million. (See also: Freeport-McMoRan Q3 Earnings Miss, Revenues Beat.)

Meanwhile, Rio Tinto management is looking to cut into its debt with a proposed $3 billion plan. The company has $21.34 billion in long-term debt with $8.38 billion in cash on its balance sheet, which puts its net debt position at about $13 billion. If successful, the debt payments will reduce Rio's risk from unforeseen capital needs, while potentially boosting its credit rating. The latter effect could help the company borrow future capital at reduced rates, thereby helping fuel cash flow even higher. (See also: Rio Tinto Unveils $3B Debt Reduction Plan.)

Freeport has a consensus Hold rating and an average analyst 12-month price target of $11, which implies a 0% premium from current levels. Rio Tinto has a consensus Buy rating and an average analyst 12-month price target of $39, which implies a 15% premium from current levels.

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