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At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Pilbara Minerals Ltd (ASX: PLS) remains the most shorted ASX share with short interest of 21.6%. This is up slightly week on week. Short sellers are betting on a lithium surplus weighing on prices.
• IDP Education Ltd (ASX: IEL) has 16.2% of its shares held short, which is down slightly week on week. This language testing and student placement company has been targeted due to student visa changes in a number of key markets.
• Syrah Resources Ltd (ASX: SYR) has short interest of 13.2%, which is up slightly week on week. Short sellers may believe this graphite miner will continue to burn through cash due to weak battery materials prices and require yet another capital raising.
• Flight Centre Travel Group Ltd (ASX: FLT) has seen its short interest ease week on week to 11.5%. Short sellers appear to have closed a few positions in response to news that the travel agent giant expects record sales in FY 2024.
• Liontown Resources Ltd (ASX: LTR) has 10.3% of its share held short, which is down sharply week on week. Liontown’s Kathleen Valley Lithium Project will soon be commencing production and adding to the supply of the white metal.
• Westgold Resources Ltd (ASX: WGX) has short interest of 8.6%, which is up strongly for a second week in a row. This may be due to doubts over the gold miner’s plan to merge with Canada-based Karoa Resources.
• Core Lithium Ltd (ASX: CXO) has short interest of 7.8%, which is down week on week. Lithium prices have become so weak that Core Lithium had to suspend mining activities to conserve cash.
• Chalice Mining Ltd (ASX: CHN) has short interest of 7.8%, which is up week on week. Short sellers may be regretting this one. The mineral exploration company’s shares rocketed 25% last week following the Federal Budget.
• Sayona Mining Ltd (ASX: SYA) has short interest of 7.6%, which is down week on week. It currently costs this lithium miner $500 per tonne more to produce its lithium than it is selling it for. This hasn’t gone unnoticed by short sellers.
• Weebit Nano Ltd (ASX: WBT) has returned to the top ten with short interest of 7.6%. This semiconductor company’s shares have lost almost half their value this year. Despite this, it seems that short sellers believe they can fall even further given the company’s lack of meaningful revenue and its significant competition.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• 2 highly rated ASX growth shares to buy before it’s too late
• Why this smashed ASX 200 share is a fundie’s top value pick
• Here are the top 10 ASX 200 shares today
• Why Clearview, Loyal Lithium, Polynovo, and Weebit Nano shares are falling
• Buy one, sell the other: Goldman’s verdict on these 2 ASX 200 travel shares

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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Flight Centre Travel Group and Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for the winning combination of market-beating returns and an attractive dividend yield (who isn’t?), then it could be worth checking out the two ASX stocks in this article.

That’s because the team at Morgans thinks so highly of these stocks that it has put them on its best ideas list this month and is tipping very big returns over the next 12 months.

Here’s what you need to know about these stocks:

Cedar Woods Properties Limited (ASX: CWP)

Morgans thinks this property company is great value at current levels and sees scope for the ASX stock to re-rate to higher multiples. Particularly given that demand for its offering is improving and should result in improving margins in the near future. The broker explains:

CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP’s exposure to lower priced stock in higher growth markets sees further potential to drive earnings. On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.

Morgans has an add rating and $5.60 price target on its shares. This implies potential upside of 20% for investors from current levels. In addition to this upside, the broker is forecasting a 4.3% dividend yield from its shares.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX stock that could be a buy according to Morgans is youth fashion retailer Universal Store. The broker likes the company due to its growth opportunities and resilient target market. It said:

Our positive view about the fundamental long-term appeal of Universal Store as a retail proposition and investment opportunity is undiminished. The growth opportunities are in place. Universal Store’s women’s banner Perfect Stranger is performing well, justifying an acceleration in its network expansion; the prospect of building out the wholesale distribution channels acquired with CTC is compelling; and customers continue to respond well to the Universal Store banner, rendering its plan to grow this network to more than 100 stores more than reasonable. Although its core youth customers are far from buoyant, they continue to spend.

Morgans has an add rating and $6.50 price target on its shares, which suggests potential upside of 20%. Making the deal even sweeter for investors is that the broker believes this ASX stock will provide a fully franked ~5% dividend yield.

The post Morgans says these ASX stocks can rise 20% (and pay big dividends!) appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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.

There are plenty of ASX 200 dividend stocks to choose from, but which ones could be in the buy zone?

Three that analysts have recently named as buys are listed below. Here’s what they are saying about them:

Deterra Royalties Ltd (ASX: DRR)

Morgan Stanley thinks that Deterra Royalties could be an ASX 200 dividend stock to buy.

It is a mining royalty company with a range of operations, including its cornerstone asset Mining Area C in the Pilbara region of Western Australia.

The broker is feeling positive about the company’s outlook thanks to favourable commodity prices. So much so, it is one of its favourites in the mining sector right now.

It also believes Deterra Royalties is well-positioned to pay some big dividends in the near future. It is forecasting fully franked dividends per share of 32.7 cents in FY 2024 and 39 cents in FY 2025. Based on the current Deterra Royalties share price of $4.84, this will mean dividend yields of 6.75% and 8%, respectively.

Morgan Stanley has an overweight rating and $5.60 price target on its shares.

Inghams Group Ltd (ASX: ING)

Over at Morgans, its analysts think that Inghams could be an ASX 200 dividend stock to buy this week. It is Australia’s leading poultry producer and supplier.

The broker likes the company due to its market leadership position, favourable consumer trends, and attractive valuation. In fact, in respect to the latter, the broker feels that Ingham’s shares are actually “undervalued” at current levels.

Morgans is also expecting some generous dividend yields in the near term. Its analysts are forecasting fully franked dividends of 22 cents per share in FY 2024 and then 23 cents per share in FY 2025. Based on the current Inghams share price of $3.79, this equates to yields of 5.8% and 6.1%, respectively.

The broker has an add rating and $4.40 price target on its shares.

Suncorp Group Ltd (ASX: SUN)

Finally, Goldman Sachs thinks that Suncorp could be a top ASX 200 dividend stock to buy. It is one of Australia’s largest insurance companies.

The broker believes that Suncorp is well-positioned thanks to tailwinds in the general insurance market. It expects this to underpin fully franked dividends per share of 78 cents in FY 2024 and 83 cents in FY 2025. Based on the current Suncorp share price of $16.31, this will mean dividend yields of 4.8% and 5.1%, respectively.

Goldman has a buy rating and $17.54 price target on the company’s shares.

The post 3 ASX 200 dividend stocks for investors to buy appeared first on The Motley Fool Australia.

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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 positions in and has recommended Goldman Sachs Group. 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.

There are plenty of ASX growth shares for investors to choose from on the local market.

But which ones could be top options for investors in May? Let’s take a look at a couple that are highly rated by analysts. Here’s what they are saying about them right now:

IDP Education Ltd (ASX: IEL)

Goldman Sachs remains very positive on this language testing and student placement company and sees it as an ASX growth share to buy.

Its analysts don’t appear overly concerned by the short term headwinds that IDP Education is facing. Instead, they are focusing on the long term, which the broker believes is extremely positive. Goldman explains:

With valuation near all-time lows (25x P/E vs 45x historically), and share px -17% in the last month, we would argue the market has priced these cuts already given VA Consensus is relatively flat. We are nearing the base for FY25E earnings and are now capitalising what we see as trough earnings/growth at a historically low multiple. IEL’s structural growth outlook and business quality remain unchanged in our view, and we reiterate Buy.

Goldman currently has a buy rating and $26.60 price target on IDP Education’s shares.

NextDC Ltd (ASX: NXT)

The data centre market certainly is a great place to be right now. That’s because the artificial intelligence (AI) boom is accelerating demand for data centre capacity.

A testament to this was NextDC’s recent capital raising. It raised $1.3 billion from investors in April to accelerate “the development and fit out of NEXTDC’s leading digital infrastructure platform in its core Sydney and Melbourne markets to meet unprecedented growth in customer demand and position itself to take advantage of ongoing market expansion over the medium term.”

It is thanks partly to this demand that Morgans thinks that the company is an ASX growth share to buy right now. It explains:

NXT should deliver another good set of results in FY24 with some upside risk to guidance, in our view. Structural demand for cloud and colocation remains incredibly strong. NXT’s new S3 and M3 data centres are now open. Consequently, we expect significant new customer wins over the next six-to-twelve months (including CSP options being exercised). Sales should drive the share price higher. NXT looks comfortably on-track to generate over $300m of EBITDA in the next three to five years.

Morgans currently has an add rating and $19.00 price target on NextDC’s shares.

The post 2 highly rated ASX growth shares to buy before it’s too late appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Nextdc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Idp Education. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

These two ASX dividend shares can provide excellent passive income and could be solid options for capital growth, too.

The high interest rate and inflationary environment has led to some stocks trading at a large discount to their underlying value.

I’m optimistic about the future of the below two ASX dividend shares.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a company that invests in unlisted technology businesses. Software is an attractive industry to invest in because of the high margins that technology companies can generate on their intangible offerings. On top of that, software businesses can rapidly sell another (digital) subscription, they don’t need to open another store or make another car or table.

Typically, Bailador invests in companies that are run by their founders and have proven business models with attractive unit economics, international revenue generation, and a “huge market opportunity.”

Rosterfy is one of the most recent Bailador investments. This company provides volunteer and workforce management software to not-for-profit organisations, government volunteering bodies, and mass-scale sporting and other events.

Since Bailador’s investment, Rosterfy has seen strong annual recurring revenue (ARR) growth, driven by a combination of new customer wins and account expansion from existing customers.

Rosterfy generates more than 50% of its ARR outside of Australia, with customers including FIFA, EUFA, Tennis Australia, Golf Australia, Lifeline Australia, British Heart Foundation, Greater London Authority, Brisbane City, Auckland Council and Las Vegas Convention and Visitors Authority.

The ASX dividend share pays a dividend yield equivalent to 4% of the pre-tax net tangible assets (NTA). The Bailador share price is trading at a 27% discount to its post-tax NTA and a 34% discount to the pre-tax NTA. The NTA is reported as the underlying value of Bailador’s portfolio of investment stakes, cash, and so on.

Due to the huge NTA discount, Bailador may actually have a current cash yield of 6%, or 8.6% when grossed up for franking credits.

Rural Funds Group (ASX: RFF)

This ASX dividend share is one of my favourite real estate investment trusts (REITs) on the ASX. It owns a large portfolio of farmland across almonds, macadamias, vineyards, cattle and cropping.

The business is currently investing many millions of dollars into new macadamia plantings, which, when completed, can unlock more rental income.

High interest rates are a short-term obstacle to distribution and rental profit growth. But, the business aims to grow its distribution by 4% every year. Rural Funds has grown or maintained its distribution yearly since it started paying distributions in 2014. That’s a pleasing level of stability.

Many Rural Funds’ contracts have rental indexation linked to inflation or a fixed annual increase, plus the occasional market review. This can help offset the ASX dividend share’s higher interest costs and help fund organic distribution growth in the future.

The current Rural Funds distribution yield works out to be 5.8%.

After its assets were recently independently valued, Rural Funds said in its FY24 half-year result that its adjusted net asset value (NAV) was $3.07. The Rural Funds share price closed on Friday at $2.03.

The post 2 cheap ASX dividend shares I’d buy for income appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments and Rural Funds Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments. The Motley Fool Australia has positions in and has recommended Rural Funds Group. The Motley Fool Australia has recommended Bailador Technology Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Friday, the S&P/ASX 200 Index (ASX: XJO) ended the week in the red. The benchmark index sank 0.85% to 7,814.4 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to rebound

The Australian share market looks set to rebound on Monday following a relatively positive finish on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 35 points or 0.45% higher. On Friday in the United States, the Dow Jones was up 0.3% and the S&P 500 rose 0.1%, but the Nasdaq fell 0.1%.

Oil prices rise

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a decent start to the week after oil prices rose on Friday. According to Bloomberg, the WTI crude oil price was up 1.05% to US$80.06 a barrel and the Brent crude oil price was up 0.85% to US$83.98 a barrel. Optimism over improving demand drove oil prices higher last week.

Elders half year results

Elders Ltd (ASX: ELD) shares will be on watch on Monday when the agribusiness company releases its half year results. The market won’t be expecting a strong result from Elders today. A trading update last month revealed that “first half trading for FY24 was significantly below expectations.” Investors will no doubt be hoping that management is able to at least reiterate its full year underlying EBIT guidance of between $120 million and $140 million.

Gold price races higher

ASX 200 gold mining shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a very good start to the week after the gold price raced higher on Friday. According to CNBC, the spot gold price was up 1.45% to US$2,419.8 an ounce. This was driven by Chinese stimulus and US rate cuts bets.

Macquarie Technology downgraded

The Macquarie Technology Group Ltd (ASX: MAQ) share price could be fully valued according to analysts at Goldman Sachs. This morning, the broker has downgraded the data centre operator’s shares to a neutral rating with a trimmed price target of $90.20. Goldman explained: “MAQ has re-rated from 13x to 19x NTM EV/EBITDA over the last 12 months, now valuing MAQ in line with our SOTP and factoring in execution of IC3W (though trading at a stable discount vs NXT). We see MAQ as appropriately valued relative to peers and its earnings growth outlook, and downgrade to Neutral.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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• Here’s how the ASX 200 market sectors stacked up last week
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• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Friday
• How much could a $10,000 investment in Woodside shares be worth in 12 months?

Motley Fool contributor James Mickleboro has positions in Nextdc and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you want to diversify your portfolio, then having some exposure to the mining sector could be one way to do it.

But which ASX mining stocks could be good options for investors right now?

Let’s take a look at a couple that have been named as best buys by brokers this month. They are as follows:

Regis Resources Ltd (ASX: RRL)

The first ASX mining stock to look at buying is Western Australia-based gold miner Regis Resources.

The team at Bell Potter is feeling very positive about the company’s outlook and sees a lot of value in its shares at current levels. Especially given its all-Australian operations and takeover appeal. It currently has a buy rating and $2.80 price target on its shares. The broker commented:

RRL is an established multi-mine gold producer with all its operating mines located in Western Australia. The Duketon Gold Project (located in the Laverton region 350km north, north-east of Kalgoorlie in WA) is RRL’s flagship project and comprises the Duketon North Operations (DNO) and the Duketon South Operations (DSO) which produce a combined ~300kozpa. As one of the largest ASX listed gold producers, we are attracted to its all- Australian asset portfolio and organic growth options which are unique at this scale. Furthermore, we see key opportunities in the fundamental, medium-term outlook and, in our view, these may also make RRL an appealing corporate target in the current conducive M&A environment.

South32 Ltd (ASX: S32)

Another ASX mining stock that could be a buy according to analysts is South32. It is a diversified miner with operations across a number of future-facing metals. This includes aluminium, copper, nickel, and zinc.

Morgans is a fan of the company due partly to the transformation of its portfolio and favourable commodity prices. It currently has South32 on its best ideas list with an add rating and $4.10 price target. The broker commented:

S32 has transformed its portfolio by divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

The post 2 of the best ASX mining stocks to buy now appeared first on The Motley Fool Australia.

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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.

The ASX growth stock Close The Loop Ltd (ASX: CLG) has excellent potential for returns, in my opinion. I’ve bought multiple parcels of shares for my portfolio, and I’m going to explain why I’m bullish about the business.

With the Close The Loop share price down significantly from its former heights – see below – I think it’s a good time to invest.

The business collects and repurposes products through takeback programs and also provides sustainable packaging products. Its goal is for zero waste to go to landfills by recovering a wide range of electronic products, print consumables, cosmetics, plastics, paper, and cartons. It’s also involved in reusing toner and post-consumer soft plastics for asphalt additives.

The ASX growth stock wants to be a global leader in the fast-growing ‘circular economy’, with an intention for global growth.

It currently operates in four places – Australia, the USA, Europe and South Africa. A large majority of its revenue comes from the US and Australia.

Growth of the circular economy

Close The Loop says the world has a circularity problem, with only a small percentage of consumer electronics being reused.

But, it has already reached a sizeable scale. It re-manufactures over 500,000 electronic consumables annually, as well as processing over 25 million print consumables each year. What can’t be re-used is recycled.

The company notes that major original equipment manufacturers (OEMs), like HP, have ambitious ESG targets to increase circularity in the economy. Close The Loop suggests those OEMs need to partner with providers to achieve those goals.

HP is a partner of the ASX growth stock, with a three-year revenue-sharing contract. HP wants to reach 75% circularity for products and packaging by 2030 – it has reached 40% circularity by weight. HP also wants to use 30% postconsumer recycled content across HP’s personal systems and print product portfolio by 2025 – in 2022 it achieved 15%.

HP is just one business, there’s a lot of potential value for Close The Loop to provide and capture across the world.

Strong financial performance

The business is delivering good growth, helped by the acquisition of ISP Tek Services. In the FY24 first-half result, revenue increased 76% to $103.1 million, gross profit increased 94% to $37.3 million, underlying net profit before tax (NPBT) jumped 204% to $15.2 million and operating cash flow increased 105% to $12.3 million.

Close The Loop used a lot of the cash generated to improve its balance sheet – HY24 net debt (debt minus cash) decreased by $11.8 million, with a $4.2 million repayment of borrowings.

It’s very pleasing to see the company’s profit margins are rising at the various profit levels, as it means net profit can grow much quicker than revenue. And the revenue outlook is very positive, in my opinion.

Cheap valuation

The forecast on Commsec suggests the ASX growth stock could achieve 4.2 cents of earnings per share (EPS) in FY24, which would put the Close The Loop share price at 8x FY24’s estimated earnings. EPS could rise by 38% over the next two years to 5.8 cents, which would mean it’s trading at just 5.6x FY26’s estimated earnings.

In my opinion, it would be very reasonable for this business to trade in 2026 at say 12x FY26’s earnings, which would mean the Close The Loop share price could double in two years if that happened.

I expect the business to have a long growth runway, not just two years. I’m excited about what it can achieve over the rest of this decade.

The post 1 overlooked ASX growth stock I’m chasing for multibagger potential appeared first on The Motley Fool Australia.

More reading

• Why I’m bullish about this ASX stock and recently bought more!
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Motley Fool contributor Tristan Harrison has positions in Close The Loop. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Close The Loop. The Motley Fool Australia has recommended Close The Loop. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

While the yields on offer from term deposits are a lot more attractive than they were a couple of years ago, they still don’t match up to some of the dividend yields available on the Australian share market.

So, if your risk tolerance allows for it, it could pay to invest in shares rather than term deposits. But which ASX dividend shares?

Three buy-rated ASX dividend shares that are tipped to provide investors with 5%+ yields are listed below. Here’s why they could be worth considering:

Accent Group Ltd (ASX: AX1)

The team at Bell Potter is expecting some big yields and major upside from Accent Group’s shares. It is a footwear focused retailer with over 800 stores across a large number of brands. This includes Sneaker Lab, Platypus, Stylerunner, and The Athlete’s Foot.

Bell Potter currently has a buy rating and $2.50 price target on its shares.

As for that all-important income, the broker is expecting fully franked dividends per share of 13 cents in FY 2024 and then 14.6 cents in FY 2025. Based on the latest Accent share price of $1.80, this represents dividend yields of 7.2% and 8.1%, respectively.

Stockland Corporation Ltd (ASX: SGP)

The team at Citi thinks that Stockland could be an ASX dividend share to buy.

It is a property company that develops, owns, and manages retail centres, business parks, logistics centres, office buildings, residential communities, and retirement living villages.

Much like Accent, the broker expects some very attractive and term deposit-busting yields from its shares in the near term. The broker is forecasting dividends per share of 26.2 cents in FY 2024 and then 26.6 cents in FY 2025. Based on the current Stockland share price of $4.65, this will mean yields of 5.6% and 5.7% yields, respectively.

Citi currently has a buy rating and $5.20 price target on its shares.

Transurban Group (ASX: TCL)

A third ASX dividend share that is tipped to provide better yields than term deposits is Transurban.

It is a toll road giant with a growing number of important roads across both Australia and North America. This includes the Cross City Tunnel and Eastern Distributor in Sydney, and CityLink and the West Gate Tunnel Project in Melbourne.

Citi is a fan of the company and is forecasting dividends per share of 63 cents in FY 2024 and 65 cents in FY 2025. Based on the current Transurban share price of $12.43, this will mean yields of 5.1% and 5.2%, respectively.

Citi has a buy rating and $15.50 price target on its shares.

The post Forget term deposits and buy these ASX dividend shares appeared first on The Motley Fool Australia.

More reading

• Buy Rio Tinto and these ASX 200 dividend shares
• Will the ‘resurgence in demand’ for shopping centres boost ASX REITs?
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• Brokers name 4 ASX 200 dividend shares to buy
• Why is the Transurban share price lagging the market today?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Transurban Group. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There’s nothing quite like the sound of passive income from S&P/ASX 200 Index (ASX: XJO) dividend stocks landing in your bank account to put a smile on your face.

Okay, there’s no sound.

But I’m sure you know what I mean!

Aussie investors are a bit spoiled for choice when it comes to passive income stocks, especially with many offering full franking credits.

But I want to drill down to just one glorious ASX dividend stock today.

Namely, ASX 200 miner Rio Tinto Ltd (ASX: RIO).

We’ll dig into the numbers in a tick. But first…

Trailing yields and future yields

Before we look at the passive income potential of Rio Tinto shares, bear in mind that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.

In the case of Rio Tinto, the dividend payouts have come down from the heady years of 2021 and 2022 when the iron ore price was rocketing to all-time highs.

However, the final dividend paid in April this year was up 20% on the final dividend paid in April 2023.

And with the iron ore price up 16% since 4 April, proving more resilient than many analysts have been forecasting, I believe the passive income outlook for Rio Tinto shares remains quite strong.

With that said…

Mining Rio Tinto for annual passive income

Atop offering a juicy yield, Rio Tinto has a track record of delivering two fully franked dividends a year for more than a decade.

As for the past year, the ASX 200 miner paid a fully franked interim dividend of $2.61 a share on 21 September.

And Rio Tinto gave passive income a pleasant surprise when it reported its full-year results on 21 February.

Although revenue slipped 3% from 2022 to US$54.04 billion, and underlying earnings before interest, taxes, depreciation and amortisation EBITDA declined 9% year on year to US$23.89 billion, management declared a fully franked final dividend of $3.93 a share.

All told then, this glorious ASX 200 dividend paid out a total of $6.54 a share in fully franked dividends over the past 12 months.

Or $1,962 in passive income from just 300 shares.

Rio Tinto share price snapshot

Atop that very handy passive income (which we’ve established makes no sound when you receive it), Rio Tinto shares also offer the potential for capital gains.

Over the past year, the Rio Tinto share price has increased more than 21.9%, closing on Friday at $132.20 a share.

The post Buy 300 shares in this glorious ASX 200 dividend stock and create almost $2,000 in passive income appeared first on The Motley Fool Australia.

More reading

• ASX 200 mining shares charging higher amid China’s $210 billion cash injection
• Buy Rio Tinto and these ASX 200 dividend shares
• What’s the outlook for ASX iron ore shares after the federal budget?
• How ASX growth shares can become top dividend stocks
• How to choose ASX shares for passive income

Motley Fool contributor Bernd Struben 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.