Looking for great FTSE 100 shares to buy with low price-to-earnings (P/E) ratios and huge dividend yields?

Here’s one of my favourites this December. I think it could deliver terrific capital gains and dividend income over the next decade.

Cheap on paper

Purchasing mining stocks like Rio Tinto (LSE:RIO) today demands a higher level of courage than usual. In the near future, commodities prices could remain volatile due to developments inside the world’s two largest economies.

In the US, Donald Trump’s return as President could mean thumping trade tariffs, while rising inflation could limit interest rate cuts by the Federal Reserve. Both scenarios could deal significant damage to global growth.

In China meanwhile, key data shows that the economic cooldown there continues to rumble on. Trouble in the beleaguered real estate market is a particular concern for commodities producers too.

Could these troubles now be baked into Rio Tinto’s low share price however? I think so. Its shares are down almost 15% since the start of the year.

As someone who invests for the long term, I think the miner’s investment case remains compelling. Phenomena such as the growing renewable energy sector, extensive infrastructure upgrades in the West, emerging market urbanisation, and increasing digitalisation all bode well for metals demand moving forwards.

Growth potential

As a major supplier of key metals like iron ore and copper, Rio Tinto is well placed to capitalise on this environment. It has the financial strength too, to maximise its opportunity by improving and expanding existing mines, exploring for new assets, and acquiring other operators.

I’m especially encouraged by its plans to expand the ‘energy transition metals’ side of the business. This has significant growth potential thanks to rising industries including clean energy, electric vehicles (EVs) and battery storage.

In October, it announced plans to buy Arcadium Lithium for $6.7bn, significatly boosting its existing white metal operations. And today (4 December) it outlined plans to supercharge copper output over the next decade, another key transition metal thanks to its conductive qualities.

Ramp-ups at its flagship Oyu Tolgoi mine mean copper production is tipped at 780,000-850,000 tonnes in 2025, up from 660,0000-720,000 tonnes this year. And by 2030, Rio Tinto’s targeting red metal output of 1m tonnes a year.

The business plans to invest between $10bn and $11bn a year over the mid term to continue growing its portfolio. A robust balance sheet means it looks in good shape to meet this target too.

Rio Tinto’s net-debt-to-EBITDA ratio was a modest 0.4 times as of June.

A top value stock

On balance, I think Rio Tinto shares are worth serious consideration at current prices of £49.84. For 2025, it trades on a forward P/E ratio of 9.4 times. Meanwhile, its dividend yield for next year sits at a market-beating 6.1%.

Despite this year’s drop, Rio Tinto’s share price is still 83% more expensive than it was in 2014. I think it could rise strongly again over the next 10 years.