The Rio Tinto Ltd (ASX: RIO) share price has been a strong performer within the S&P/ASX 200 Index (ASX: XJO) over the past year, rising by 28%, as the chart below shows.

Rio Tinto is involved with a number of commodities including iron ore, copper, aluminium, bauxite and lithium. Not many miners around the world have as much commodity diversification as Rio Tinto.

The ASX mining share may be best known as an Australian iron ore miner, but there’s a lot more to the business now. I think that makes it a much more appealing business than it was several years ago.

For me, there are at least three compelling reasons to consider the business.

Growing copper exposure

Iron ore prices can be volatile and don’t seem to have a strong outlook at present because of headwinds for both supply and demand. Non-Australian regions are looking to increase iron ore production (supply), and the huge Chinese residential construction boom isn’t happening these days (demand).

Rio Tinto has deliberately and significantly increased its exposure to copper with a number of projects. Copper is essential for a number of growth areas such as electricity grids, renewable energy, electric vehicles and so on.

One of the company’s key growth projects is Oyu Tolgoi, a huge copper operation in Mongolia. At peak production, Oyu Tolgoi is expected to produce 500,000 tonnes per annum of copper.

I think the 2026 half-year result strongly demonstrated the copper division’s performance. The sold copper price increased by 35.5%, while copper operating earnings (EBITDA) soared by 84% to US$5.7 billion. I’m not expecting every result to see that much growth.

Lithium mining

I think it was a smart move by Rio Tinto to acquire Arcadium Lithium a couple of years ago, at a time when the sector was facing significant pessimism.

Its exposure to lithium now looks very appealing, with how the lithium price has rebounded, and electric vehicle demand has increased following the fuel uncertainty because of the Middle East.

The company is not generating a lot of earnings from this division because it’s still developing its projects. But in the first half of FY26, the average realised lithium carbonate price rose 22% to US$18,960, segment revenue rose 84% to US$568 million, and underlying operating profit (EBITDA) rose 419% to US$218 million.

If lithium battery demand continues to grow, predominantly due to electric vehicles, then this division could become a meaningful contributor in the coming years.

African iron ore

It’s possible that Australian iron ore may lose some of its strategic significance in the coming years.

Fortescue Ltd (ASX: FMG) recently highlighted that there are ongoing negotiations with China Mineral Resources Group (CMRG), a key buyer of iron ore. It could become harder to get a great price for Australian iron ore.

Meanwhile, Rio Tinto is working on a huge African iron ore project called Simandou. The fact that it’s in partnership with Chinese operators (and the Government of Guinea) hopefully bodes well for the future realised (sold) iron ore price.

The scale of this project could mean significant production and appealing profit margins. I think it’s a good idea to diversify away from Australian ore.

Overall, I believe the three factors above could lead to strong profits and good dividends, making Rio Tinto’s share price appealing.

The post 3 reasons why the Rio Tinto share price could be a buy appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares
• Down 29% so far in 2026: What do brokers tip next for Fortescue shares?
• Fortescue vs Rio Tinto: Which ASX mining giant is the better buy today?
• Fortescue vs BHP: Which ASX miner is better for passive income in October?
• 9 ASX 200 shares upgraded by brokers this week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are in the market for some new portfolio additions, it could be worth seeing what the team at Morgans is saying about the three ASX shares in this article.

Does the broker rate them as buys, holds, or sells? Let’s find out:

Fortescue Ltd (ASX: FMG)

Morgans was disappointed with this iron ore giant’s recent update, which revealed weak shipments and higher net debt.

In response, the broker has downgraded Fortescue shares to a trim rating with a reduced price target of $15.40. It said:

We have long argued that investing material capital in near-term loss-making projects (magnetite and new energy) has not diversified Fortescue, and has instead left group earnings more exposed to the iron ore price. Magnetite adds more iron ore exposure but at a higher cost, while new energy investment, and US$0.9-1.3bn of FY27 decarbonisation spend, are funded from hematite cash flow. 

This dynamic is starting to show in the numbers. Fortescue flagged that net debt rose US$1.9bn in 1Q27, equal to the final dividend (US$1.0bn) plus quarterly capex (US$0.9bn), implying negative FCF for the quarter. We attribute this mainly to weaker hematite cash flow after the central buying group China Mineral Resources Group (CMRG) reportedly halted purchases of two of Fortescue’s products during the quarter, leaving shipments 6% and actual sales 14% below Visible Alpha (VA) consensus in 1Q27. On updated estimates we lower our rating to TRIM (from HOLD) with an A$15.40 target price (was A$18.70).

Guzman Y Gomez Ltd (ASX: GYG)

Another ASX share that has been downgraded by Morgans is quick service restaurant operator Guzman Y Gomez.

While it has been pleased with its resilient performance, the broker cut its rating in response to recent share price strength. 

Morgans has downgraded Guzman Y Gomez shares to an accumulate rating with an improved price target of $31.30. It said:

We view GYG’s 1Q27 trading update as evidence that its sales are resilient. Backing out the high-single digit first seven weeks already disclosed (we estimate ~8.5%, supported by the Uber Eats deal), comps ran at ~5.5% in weeks 8-13, transaction-led and in line with the mid-single digit FY27 guidance. 

GYG remains our key pick in the QSR sector and the highest-quality operator in our coverage. We lift our FY27 same-store sales (SSS) growth forecast by 50bps to 5.5% and refine our margin mix, which raises FY27 underlying EPS by 1.9% and our price target to A$31.30 (from A$31.00). We move to ACCUMULATE (from BUY) given recent share price appreciation and would be buyers on any weakness.

Megaport Ltd (ASX: MP1)

One ASX share that Morgans is recommending to clients is cloud infrastructure provider Megaport.

It was impressed with its recent update, which revealed a significantly stronger earnings outlook.

In response, the broker has retained its buy rating on Megaport shares with an improved price target of $27.00. It said:

MP1 recently raised its FY27 EBITDA guidance by 25%. The compute and network businesses continue to deliver above expectations and MP1 announced three new AI infrastructure contracts with a Total Contract Value of ~A$1bn. Collectively these set a glide path for annualised EBITDA in excess of $850m. >We upgrade our EPS forecasts materially. Our Target Price lifts to A$27 per share and we retain our BUY recommendation.

The post Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares appeared first on The Motley Fool Australia.

More reading

• 3 reasons why the Rio Tinto share price could be a buy
• UBS’ top nine ASX large-cap stock picks
• Here are the top 10 ASX 200 shares today
• Down 29% so far in 2026: What do brokers tip next for Fortescue shares?
• Fortescue vs Rio Tinto: Which ASX mining giant is the better buy today?

Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Droneshield vs Pro Medicus shares: Which ASX growth stock comes out on top?

Weighing up Droneshield Ltd (ASX: DRO) and Pro Medicus Ltd (ASX: PME) as growth shares? Both are well-known names in their own fields, but they couldn’t be more different. Whether you’re into defence tech or backed by healthcare innovation, choosing between Droneshield and Pro Medicus means thinking about more than just which one’s made headlines lately. Let’s take a closer look at what sets them apart for ASX growth investors.

The case for Droneshield

Droneshield rides the wave in anti-drone and counter-drone technology. The company’s artificial-intelligence-driven hardware and software help protect critical infrastructure, venues, and government operations from drone threats – a niche but increasingly important sector. Its products, such as DroneGun and DroneSentry, are in use by militaries, airports, and commercial operators across Australia, the US, and the UK.

From a fundamentals angle, a few things really stand out:

• Market cap: $1.45 billion — Droneshield is a chunky player in Australian defence tech, but much smaller than Pro Medicus.
• P/E ratio: 433.75, which is extremely high on face value. Note, though, Droneshield’s earnings per share is negative (-$0.033), so this P/E may be based on adjusted or forward figures rather than traditional trailing earnings.
• Dividend yield: 0.00%. This is a pure growth story — you’re not investing here for income today.

Droneshield’s share price has had a wild ride recently and is well down for the year, but its underlying business taps into a field where new geographies and customers could drive future bursts of growth.

The case for Pro Medicus

Pro Medicus is no stranger to growth investors. It’s a leading Australian medical imaging software company, providing radiology systems and cloud-based solutions for hospitals and health networks, with a particularly strong foothold among US clients. If healthcare digital transformation continues, Pro Medicus is clearly positioned to benefit.

Looking at the key metrics:

• Market cap: $17.31 billion — more than ten times Droneshield’s, putting Pro Medicus up with the ASX big hitters.
• P/E ratio: 65.35, reflecting very high growth expectations, but nowhere near the triple-digit figure we see at Droneshield.
• Dividend yield: 0.42%. While modest, Pro Medicus does pay regular, fully franked dividends, which can be appealing for some growth-minded income seekers.
• Earnings per share: 2.536, well into positive territory and supporting sustainable growth alongside dividends.

Pro Medicus has a proven track record of scaling up from Australia to dominate radiology tech for major hospitals worldwide, and its fundamentals show the company is profitable, pays dividends, and holds a healthy valuation compared to its own sector.

Valuation comparison

Here’s how the two stack up on key numbers:

Metric	Droneshield	Pro Medicus
Market Cap	$1.45 billion	$17.31 billion
P/E Ratio	433.75	65.35
Earnings per Share	-0.033	2.536
Dividend Yield	0.00%	0.42%
Franking	–	100%

Note: Droneshield’s P/E ratio appears mathematically inconsistent with its negative earnings per share. This suggests the P/E may be forward-looking or based on adjusted earnings rather than trailing net profit.

Pro Medicus trades on a much lower P/E than Droneshield, though both are considered highly valued, especially when compared to classical “value” names. Pro Medicus also provides a small fully franked dividend, absent from Droneshield.

Recent share price momentum

Comparing recent share price performance up to 9 October 2026:

• Droneshield: Closed at $1.57 on 9 Oct 2026. Its year-to-date return is a rough -49.2%, with the past few weeks also showing persistent declines after a small spike in late September.
• Pro Medicus: Closed at $165.73 on 9 Oct 2026. Its year-to-date return is also in the red at -24.7%, but well ahead of Droneshield. The recent movement was positive, gaining 4.5% on the day, and showing several up days in the past fortnight.

Both have struggled year-to-date, but Pro Medicus has been the less volatile and better performing of the two over the period measured.

Which is the better buy?

If I need to pick just one as the stronger ASX growth stock, my lean is towards Pro Medicus. While Droneshield is tackling an exciting and rapidly evolving sector, its negative earnings, lack of dividends, and extreme valuation make it a riskier bet for now. Pro Medicus is far from cheap, but its profitability, fully franked dividends (even if small), positive earnings, and less severe drawdown this year all make it the stand-out for me between these two. There’s also proven history in scaling complex software, with stickier revenue and wide adoption in the US. I reckon Pro Medicus offers the higher-quality growth profile on the data at hand — which is what I want in my portfolio, even at a premium price tag.

The post Droneshield vs Pro Medicus: Which is the better ASX growth stock right now? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Could the DroneShield share price reach $2 in 2027?
• Here are the top 10 ASX 200 shares today
• Life360 vs Droneshield: Which ASX tech stock is a better buy?
• These 3 ASX shares have the ingredients of long-term compounders

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.