If youâre an income investor, you will no doubt have considered the Rio Tinto Ltd (ASX: RIO) dividend at some point.
And thereâs certainly good reason for this. The mining giant regularly shares a large portion of its profits with investors in the form of dividends.
This has seen billion of dollars returned to shareholders over the last few years, much to their delight.
But that was then and this is now. Will we be able to say the same in the future or are the dividend glory days behind us? Letâs take a look and find out.
Rio Tinto dividend forecast
According to a recent note out of Goldman Sachs, its analysts are expecting Rio Tinto to continue paying generous dividends for the foreseeable future.
After paying a fully franked US$4.92 per share dividend in FY 2022, Goldman expects an increase to US$5.36 per share this year. This equates to A$8.07 per share based on current exchange rates.
And with the Rio Tinto share price currently fetching $108.45, it will mean a sizeable 7.45% fully franked yield for income investors. Not bad considering the market average usually sits at around 4%.
What about next year?
Unfortunately, Goldman Sachs is expecting Rio Tintoâs earnings to soften a touch in FY 2024. It believes this will force the mining giant to cut its dividend to US$4.68 per share or A$7.04 in local currency.
The good news, though, is that this will still mean a greater than average dividend yield for investors of 6.5%.
Should you invest?
As well as expecting the Rio Tinto dividend yield to be large in the next couple of years, the broker also sees scope for its shares to rise meaningfully.
Goldman currently has a buy rating and $136.20 price target on its shares. This implies potential upside of 25% for investors from current levels.
All in all, the broker is expecting some very strong returns over the next 12-18 months. So, if youâre not averse to investing in the mining sector, it could be well worth considering Rio Tinto.
The post How big will the Rio Tinto dividend be next year? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Rio Tinto Limited right now?
Before you consider Rio Tinto Limited, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
See The 5 Stocks
*Returns as of April 3 2023
(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}
setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()
More reading
- Could the iron ore price slide below $100 US dollars in 2023?
- Why are ASX 200 mining stocks having such a shocking end to the week?
- This ASX small-cap lithium share is leaping 13% on a deal with Rio Tinto
- ASX 200 mining shares in focus: Top broker says current iron ore price is ‘unsustainable’
- Analysts say buy these top ASX dividend stocks with 5%+ yields
Motley Fool contributor James Mickleboro 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.
from The Motley Fool Australia https://ift.tt/2AlsGNn
Stock Pick 