Here’s how much I would need to invest in Rio Tinto shares to generate a $100 monthly income

Monthly income from ASX 200 dividend shares is a great way to achieve some extra cash on the side.

Rio Tinto Ltd (ASX: RIO) has been paying dividends to investors for many years. Back in February 2009, the company paid total dividends of $1.015 a year to shareholders.

Let’s take a look at how much I would need to invest in Rio Tino shares to generate $100 in passive income.

How many Rio Tinto shares would deliver you $100 a month in dividends?

Firstly, a monthly income of $100 would equate to an annual income of $1200.

Rio is due to pay a fully franked final dividend of $3.2649 to eligible investors on April 20. This follows Rio paying a fully franked interim dividend of $3.8370 in September last year.

This means Rio’s total dividends in a year add up to $7.1019, a 5.8% dividend yield based on the company’s latest closing share price of $121.84.

In order to have received $1200 in a year of dividend income ($100 per month) from Rio Tinto shares, investors would need to own about 169 Rio Tinto shares (169 multiplied by $7.1019 a share equals just over $1200).

At Rio’s last closing share price of $121.84 a share, this would set an investor back $20,590.96.

However, analysts at Goldman are predicting Rio Tinto will pay fully franked dividends of US$5.33 (A$7.91) per share in FY23.

If this eventuates, an investor would need to own 152 shares to achieve about $100 of monthly income from Rio Tinto shares. This would cost an investor $18,519.68

Rio Tinto share price snapshot

The Rio Tinto share price has returned 1.08% in the last year.

This ASX 200 mining share has a market capitalisation of about $45 billion based on the current share price.

The post Here’s how much I would need to invest in Rio Tinto shares to generate a $100 monthly income appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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.

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