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The Australian share market traditionally offers a dividend yield of approximately 4%. But you don’t have to settle for that.

Not when there are ASX dividend stocks like the two listed below. Here’s what sort of yields analysts are expecting from them:

Accent Group Ltd (ASX: AX1)

This footwear retailer’s shares could be a good option for income investors.

That’s the view of analysts at Bell Potter, which believe the HypeDC and The Athlete’s Foot owner is well-placed due to “continuing casual footwear trends and as sports, fitness & wellness related spending remains a priority.”

The broker expects these trends to support the payment of fully franked dividends per share of 12 cents in FY 2024 and then 14.1 cents in FY 2025. Based on the latest Accent share price of $2.20, this represents dividend yields of 5.45% and 6.4%, respectively.

Bell Potter has a buy rating and $2.80 price target on its shares.

Deterra Royalties Ltd (ASX: DRR)

Another ASX dividend stock that analysts are feeling bullish about is Deterra Royalties.

It manages a portfolio of mining royalty assets across a range of commodities. This includes royalties held over BHP Group Ltd’s (ASX: BHP) Mining Area C, its cornerstone asset, in the Pilbara region of Western Australia.

The team at Morgan Stanley remains positive on the company and continues to forecast some big dividends in the near term. For example, it is expecting fully franked dividends per share of 37 cents in FY 2024 and then 34 cents in FY 2025. Based on the current Deterra Royalties share price of $5.08, this will mean yields of 7.3% and 6.7%, respectively.

The broker currently has an overweight rating and $5.65 price target on its shares.

The post Analysts say these high-yield ASX dividend stocks are buys appeared first on The Motley Fool Australia.

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More reading

• 2 ASX dividend shares to buy to supercharge your income
• How long would it take to turn $20,000 into $100,000 with ASX dividend stocks
• 2 buy-rated ASX dividend stocks with big 6%+ yields
• Last time this ASX 300 stock reported results, it surged 19%. Will it deliver again next week?
• 3 ASX dividend shares with 5%+ yields to buy now

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 recommended Accent Group. 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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The Rio Tinto Ltd (ASX: RIO) dividend was declared yesterday after the ASX had closed, along with the company’s FY23 results. The dividend is the final payment of FY23.

Rio Tinto dividend

The ASX mining share declared a final dividend of A$3.9278 per share, fully franked. This was an increase of around 20% compared to last year.

However, in US dollar terms, the final dividend of US$2.58 only increased by 14.7% year over year.

The dividend is determined in US dollars but paid to Aussies in Australian dollars.

This final dividend brought the full-year dividend to A$6.5367, which was a reduction of 8% compared to FY22. In US dollar terms, it’s a full-year payment of US$4.35 (reduced by 11.6%).

How much profit is Rio Tinto going to pay out?

The ASX mining share said the dividend payout ratio is used to decide how much it pays out. Rio Tinto aims to pay 40% to 60% of underlying earnings to shareholders as dividends on average through the cycle.

Rio Tinto has decided to payout 60% of its underlying earnings – it generated underlying earnings per share (EPS) of US$7.25 (which was down 12%).

The reported net profit after tax (NPAT) fell 19% to US$10 billion and free cash flow declined 15% to US$7.66 billion.

Rio Tinto was pleased to say that its balance sheet strength enables it to continue to invest with discipline while also paying the total dividend amounting to US$7.1 billion.

Ex-dividend date

To gain entitlement to the dividend, investors need to make sure they own Rio Tinto shares before the ex-dividend date.

The ex-dividend date is 7 March 2024, so investors have until the end of trading on 6 March 2024.

This dividend is going to be paid on 18 April 2024, so investors will need to wait just over a month.

Management comments

Rio Tinto chief executive Jakob Stausholm said:

We will continue paying attractive dividends and investing in the long-term strength of our business as we grow in the materials needed for a decarbonising world.

Rio Tinto share price snapshot

Over the past year, Rio Tinto shares are virtually flat compared to a year ago.

The post Everything you need to know about the Rio Tinto dividend appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto share price on watch following FY 2023 earnings miss
• Why Corporate Travel Management, Iress, Rio Tinto, and Woolworths shares are crashing
• Rio Tinto shares tumble despite massive renewable power agreement
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution

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.

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The Pilbara Minerals Ltd (ASX: PLS) share price will be in focus today.

This follows the release of the lithium miner’s eagerly anticipated half-year results.

Pilbara Minerals share price on watch

• Revenue down 65% to $757 million (from $2,180 million)
• EBITDA down 77% to $415 million (from $1,812 million)
• Underlying profit after tax down 78% to $273 million (from $1,242 million)
• No interim dividend for FY 2024
• Cash balance of $2.1 billion

What happened during the half?

For the six months ended 31 December, Pilbara Minerals reported a sharp drop in both revenue and profits.

The company’s revenue was down 65% to $757 million after a 67% reduction in its average realised price offset a 7% lift in sales volumes.

Things were even worse for Pilbara Minerals’ earnings, with EBITDA falling 77% to $415 million and its underlying profit after tax dropping 78% to $273 million.

In light of this profit decline, the company’s board elected not to pay an interim dividend for FY 2024.

Management commentary

Pilbara Minerals CEO, Dale Henderson, was pleased with the result given the tough trading conditions. He said:

The first half of the financial year represents a strong set of operational outcomes and successful project milestones that continue to advance the Company’s growth strategy as an emerging lithium materials leader.

Strong EBITDA margins of 55% were delivered during the period despite the softer pricing environment for lithium. Although pricing has reduced significantly from the prior year record highs, the Company finds itself in a position of strength. Our strong balance sheet positions the business to navigate any period of softer pricing and provides a competitive advantage relative to many peers within the sector.

Commenting on the company’s decision not to pay a dividend, the CEO said:

To further reinforce the balance sheet, prudent steps were undertaken to further preserve capital including the decision to withhold any interim dividend payment.

Outlook

Henderson remains positive on the future, noting that the company’s low costs leave it well-positioned in the current environment. He said:

With the Company’s low unit-cost structure and strong balance sheet, Pilbara Minerals is uniquely placed to better withstand periods of softer pricing whilst continuing to build-out the production base to capitalise on improved pricing conditions.

Management also advised that its FY 2024 capital expenditure guidance is down slightly to $820 million to $875 million.

The Pilbara Minerals share price is down 14% over the last 12 months.

The post Pilbara Minerals share price on watch amid 78% half-year profit decline and no dividend appeared first on The Motley Fool Australia.

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More reading

• Pilbara Minerals shares could drop 12% on upcoming results if history repeats itself
• These are the 10 most shorted ASX shares
• 3 things ASX investors should watch this week
• Here are the top 10 ASX 200 shares today
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution

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.

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Are you on the lookout for some new additions to your income portfolio? If you are, then read on.

Listed below are three ASX 200 dividend shares that brokers have recently named as buys.

Here’s what sort of dividend yields you can expect from them in the medium term:

QBE Insurance Group Ltd (ASX: QBE)

Goldman Sachs remains bullish on this insurance giant’s shares following the release of its full-year results.

It was pleased with its performance and feels its guidance is conservative. It believes that it “does not fully reflect the extent of underlying ex CAT improvement noting rate v inflation trends flagged for FY24.”

Goldman has a buy rating and $18.65 price target on the company’s shares.

In addition, with Goldman forecasting a 62 US cents per share dividend in FY 2024 and a 61 US cents per share dividend in FY 2025, investors can expect to receive yields of 5.6% and 5.5%, respectively.

Stockland Corporation Ltd (ASX: SGP)

Over at Citi, its analysts believe that this residential and land lease developer and retail, logistics and office real estate property manager could be an ASX 200 dividend share to buy.

Last week, the broker put a buy rating and $5.00 price target on its shares.

As for income, Citi expects dividends per share of 26.2 cents in FY 2024 and 26.6 cents in FY 2025. This represents dividend yields of 5.7% and 5.8%, respectively.

Telstra Group Ltd (ASX: TLS)

Finally, Goldman Sachs is also feeling positive about Telstra following its results release this month.

The broker responded to the result by retaining its buy rating with a $4.55 price target. It continues to see the company’s low risk growth through to 2025 as attractive.

The broker expects this to underpin fully franked dividends of 18 cents per share in FY 2024, 19 cents per share in FY 2025, and then 20 cents per share in FY 2026. This represents yields of 4.6%, 4.9%, and 5.15%, respectively.

The post Buy these ASX 200 dividend shares for a big income boost appeared first on The Motley Fool Australia.

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More reading

• Here are 4 ASX 200 REITs results catching the eye on Wednesday
• Buy Telstra and these ASX 200 dividend stocks
• Retirees: Here’s how to boost your pension in 2024
• Here are the top 10 ASX 200 shares today
• Leading brokers name 3 ASX shares to buy 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 Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra Group. 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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ASX lithium shares are a problem child for many investors at the moment.

Lithium prices have plunged horribly and that’s meant that pretty much any stock related to the battery ingredient has copped moderate to severe losses.

Back in November 2022, which was only 15 months ago, each tonne of lithium carbonate was going for near enough to 600,000 CNY. Now it can’t even sell for six digits.

And 2024 is off to a poor start.

“New estimates showed that new electric vehicle sales in China plunged by nearly 40% from the previous month in January, stretching the pessimism following the slowdown from the previous year,” stated TradingEconomics.

“The slowdown in electric vehicle sales in China limited lithium demand for battery manufacturers, driving factories to skip their typical restocking season.”

For some miners, extracting lithium has become uneconomic, so they have responsibly shut down their projects. 

But, of course, this exacerbates the downward pressure on their stock price as investors don’t want to have their money parked in a non-productive asset.

This lithium mine is still producing at a profit

Incredibly, amid this bleak situation, experts are still insisting that those willing to invest long-term should pounce on the current low prices.

The fact remains the world will need a lot of lithium to produce all the batteries required for transition to net zero. The electrification of fossil fuel technologies is an irresistible long-term movement.

Recent conflicts in places like Ukraine and the Middle East have only served to remind nations that reducing their dependence on traditional energy sources could be smart politically, as well as environmentally.

The team at Blackwattle Investment Partners is in no doubt as to which lithium stock it is backing from here onwards.

Shares for IGO Ltd (ASX: IGO) have now lost a painful 56.7% since July.

“IGO has been a poor performer due to falling lithium prices,” Blackwattle analysts said in a memo to clients.

“We believe IGO provides investors with exposure to the best lithium mine in the world, Greenbushes, which is producing at a cost still well below current weak spodumene prices.”

The team has done its research to deduce that the current malaise will ease sooner or later.

“Recently we spent some time meeting with downstream lithium converters and cathode manufacturers, and the conclusion was that destocking is gradually easing, and inventories are back down to three months’ supply.

“High-cost Chinese lepidolite supply has also started to reduce given current spot prices.”

According to CMC Invest, nine out of 17 analysts currently rate IGO Ltd as a buy.

The post Buy this ASX stock for ‘the best lithium mine in the world’ appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why ASX nickel shares are ending the week with a spring in their step
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
• Here are the top 10 ASX 200 shares today
• Core Lithium and 2 other ASX 200 lithium shares plunging to 52-week lows

Motley Fool contributor Tony Yoo 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.65% to 7,608.4 points.

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

ASX 200 expected to fall again

The Australian share market looks set to fall again on Thursday following another poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.3% lower this morning. In late trade on Wall Street, the Dow Jones is down 0.35%, the S&P 500 has fallen 0.4%, and the Nasdaq is 1% lower.

Oil prices rise

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a good session after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.1% to US$77.90 a barrel and the Brent crude oil price is up 0.8% to US$83.01 a barrel. Middle East tensions appear to be behind this rise.

Rio Tinto results

Rio Tinto Ltd (ASX: RIO) shares will be on watch today. That’s because the mining giant released its full-year results after the market close on Wednesday. Rio Tinto reported underlying EBITDA of US$23,892 million, which was a touch short of the consensus estimate of US$24,024 million. The miner declared a fully franked final dividend per share of US$2.58 per share.

Gold price edges lower

It could be a subdued session for ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.25% to US$2,035 an ounce. Comments from the US Federal Reserve put pressure on the precious metal.

Buy Woolworths shares

The team at Goldman Sachs believes investors should be snapping up Woolworths Group Ltd (ASX: WOW) shares after its selloff on Wednesday. The broker has responded by retaining its conviction buy rating with a trimmed price target of $40.40. Goldman said: “Weak 2H24 guide conceals new growth engine.”

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

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More reading

• 3 ASX 100 and ASX 200 shares I’d buy now for a $1,820 passive income in 2024!
• Rio Tinto share price on watch following FY 2023 earnings miss
• Here are the top 10 ASX 200 shares today
• Everything you need to know about the Woolworths dividend
• Why Corporate Travel Management, Iress, Rio Tinto, and Woolworths shares are crashing

Motley Fool contributor James Mickleboro has positions in 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 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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Shares for conglomerate Wesfarmers Ltd (ASX: WES) largely went sideways for all of this year, until about a week ago.

Over the past eight days, the stock has risen 9%.

So is this a buy signal? Are other investors aware of something you’re not?

Let’s see what’s going on:

Why has the Wesfarmers share price risen?

There seem to be a couple of reasons for the recent arousal in the Wesfarmers share price.

First is that the market received the company’s half-year results positively last week.

The Motley Fool’s James Mickleboro reported that Wesfarmers’ net profit after tax was up 3% to $1.4 billion despite tough conditions for the retail sector.

“This was driven largely by the Kmart Group business, which posted a 26.5% increase in earnings for the six months. 

“Management advised that its record result reflects the positive customer response to Kmart’s lowest price positioning.”

The second factor was the announcement that it would pay out a 91 cent dividend, which is the largest seen since April 2019.

Is it too late to buy?

So that’s all fantastic, but is it still worth buying Wesfarmers this late?

Opinion among the professional community is mixed.

According to broking platform CMC Invest, only two out of 17 analysts currently rate Wesfarmers shares as a buy.

A majority of 10 professionals recommend a hold, while five are urging investors to sell out.

So the answer to those considering buying Wesfarmers shares is… probably not.

Perhaps the recent price rise has made it even less attractive. 

After all, if you go back to June 2022, the Wesfarmers share price has amazingly rocketed 55%. That’s during a period when the Reserve Bank put interest rates up 13 times.

However, The Motley Fool’s Sebastian Bowen is one that doesn’t mind committing to the conglomerate now with a long-term horizon.

“Wesfarmers is a holding that I’ve been hoping to add to for a while now and just might after the company’s latest earnings. 

“Given the rising cost of living and stubborn interest rates, I think this is a great result for a company that would traditionally be described as cyclical and discretionary.”

The post The Wesfarmers share price is rising again. Should I buy the stock now? appeared first on The Motley Fool Australia.

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More reading

• Wesfarmers shares walk back from 52-week highs without dividend
• Retirees: Here’s how to boost your pension in 2024
• Why I’d put Wesfarmers shares in my ultimate ASX dividend income portfolio in 2024
• If I could buy only one ASX stock this February earnings season, it would be…
• Everything you need to know about the new Wesfarmers dividend

Motley Fool contributor Tony Yoo 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 Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. 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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Of course, here at The Motley Fool we always recommend investors practise proper diversification to manage investment risk.

But there’s nothing wrong with fantasising about wild riches from a single ASX stock. It’s just good, clean fun.

Besides, such examples demonstrate that just one or two winners can send an entire diversified portfolio into profit by cancelling out the losers.

It’s actually an advertisement for diversification.

Let’s now take a look at the journey of Telix Pharmaceuticals Ltd (ASX: TLX) and how wealthy this healthcare stock could have made you by now:

What does Telix Pharmaceuticals do?

Telix Pharmaceuticals develops diagnostic and therapeutic products for different types of cancer.

When COVID-19 first spread around the globe, financial markets understandably went into meltdown.

After all, no one knew back then whether this disease would kill half the world’s population or whether we’d be forced to live in lockdown forever.

In the worst depths of the market crash, in March 2020, you could buy Telix shares for 87 cents apiece.

Imagine that you had the wisdom to buy $20,000 worth at that point.

Over the next four years, you would have watched proudly as Telix Pharmaceuticals ticked off one milestone after another.

Perhaps the biggest achievement over that time was attaining commercial approval for its ​​prostate cancer imaging product Illuccix. This took Telix from a pre-revenue startup to one that makes its own money.

While Illucix is bringing in valuable revenue, Telix has been able to work on future products for other types of cancer, such as kidney, brain, and bone marrow.

The hero healthcare stock

This rapid growth and enormous future potential have forced the market to sit up and take notice of the healthcare stock.

As of Wednesday afternoon, the Telix stock price was trading at $11.19, which makes it an almost 13-bagger since you bought those 87 cent shares one Olympic cycle ago.

So that $20,000 you invested? It’s now worth $257,241.

Amazing.

Check out how this one winner could have supercharged a diversified portfolio.

At the time you bought the $20,000 batch of Telix shares, say you also bought five other stocks in other industries and geographies to spread your risk.

Then imagine that those five businesses all went through absolute devastation and have now shrunk to $0.

That portfolio would now be more than double what the original $120,000 outlay.

Ladies and gentlemen, right there is the power of ASX shares and diversification.

The post If you’d put $20,000 in this ASX healthcare stock during COVID-19, you’d have $257,000 now appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• The market is placing ‘zero value’ on this ASX 200 stock’s booming pipeline
• 2 ASX stock picks with explosive potential
• 2 top ASX growth shares to buy right now and hold for the long term

Motley Fool contributor Tony Yoo has positions in Telix Pharmaceuticals. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. 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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S&P/ASX 100 Index (ASX: XTO) and S&P/ASX 200 Index (ASX: XJO) shares offer a rich hunting ground for passive income investors.

ASX dividend shares are particularly appealing because, unlike the majority of their international peers, many come with franking credits.

That’s especially true amongst ASX 100 and ASX 200 dividend shares, with a lot of the top companies delivering 100% franked dividends. This means I should be able to hold onto more of my passive income at tax time.

So, here are three ASX 100 and ASX 200 shares I’d buy now for a $1,820 passive income in 2024.

But first…

Yields and diversification with ASX share portfolios

Before we dive into the three ASX passive income stocks, don’t forget the importance of diversification.

While we’ll look at three ASX 100 and ASX 200 stocks below, a properly diversified income portfolio should hold at least 10 companies. Ideally, these will operate across different sectors and varying geographic ranges, helping reduce the overall risk to my portfolio.

Also, 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. But via diversification, I’m hoping that any dip in yields from one stock will be countered by a rise from another.

With that said, here are the three ASX 100 and ASX 200 stocks I’d buy now for $1,820 passive income in 2024.

Tapping the ASX 100 and ASX 200 for passive income

First up we have ASX 100 bank stock Australia and New Zealand Banking Group Ltd (ASX: ANZ).

ANZ paid a fully franked interim dividend of 81 cents per share on 3 July. The bank paid a final dividend of 94 cents per share, franked at 56%, on 22 December. That equates to a total passive income payout of $1.75 per share.

At Wednesday’s closing price of $28.10, ANZ trades on a partly franked trailing yield of 6.2%.

With an eye on diversification, the next ASX 200 share I’d invest in today for passive income is Woodside Energy Group Ltd (ASX: WDS).

The energy stock paid a fully franked final dividend of $2.154 per share on 5 April. Woodside delivered the interim dividend of $1.243 per share on 28 September. That works out to a full-year (rounded) payout of $3.40 per share.

At Wednesday’s closing price of $30.25, this ASX 200 stock trades on a fully franked trailing yield of 11.2%.

Rounding out the list, I’d also invest in ASX 100 mining giant BHP Group Ltd (ASX: BHP) to secure my $1,820 in passive income for 2024.

BHP paid a fully franked final dividend of $1.251 per share on 28 September. Earlier this week the ASX 100 miner declared an interim dividend of 72 US cents per share (AU$1.10 per share at current exchange rates).

BHP shares trade ex-dividend on 7 March, and I can expect that payout to hit my bank account on 28 March.

Working with the current exchange rate, BHP has (or will soon have) paid $2.35 per share in dividends over 12 months. At Wednesday’s closing price of $44.47, that equates to a fully franked yield (part pending, part trailing) of 5.3%.

To the maths!

If I invest an equal amount in each of these ASX 100 and ASX 200 shares, I can reasonably aim for a yield of 7.6%.

So, to generate my $1,820 in passive income in 2024, I’d need to invest $24,053 across these three companies today.

And, as always, I’ll be hoping they deliver some solid share price gains across the year as well!

The post 3 ASX 100 and ASX 200 shares I’d buy now for a $1,820 passive income in 2024! appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Should you buy BHP shares following the miner’s half-year results?
• 5 things to watch on the ASX 200 on Wednesday
• Is the 11.3% dividend yield on Woodside shares for real?
• Why ARB, Bravura, Hub24, and Suncorp shares are storming higher

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.

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The Rio Tinto Ltd (ASX: RIO) share price will be one to watch on Thursday.

That’s because the mining giant has released its full-year results after the market close today.

Rio Tinto share price on watch following results

• Revenue down 3% to US$54,041 million
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) down 9% to US$23,892 million
• Underlying earnings per share down 12% to US$7.25
• Free cash flow down 15% to US$7,657 million
• Fully franked final dividend per share up 14.7% to US$2.58 per share

What happened in FY 2023?

For the 12 months ended 31 December, Rio Tinto reported a 3% decline in revenue to US$54,041 million and a 9% decline in underlying EBITDA to US$23,892 million. This reflects solid growth from the company’s iron ore operations, which was fully offset by weaker performance across the rest of its operations due to lower commodity prices and higher costs.

The star of the show was Rio Tinto’s Iron ore operation, which reported a 4% increase in revenue to US$32,249 million and a 7% increase in underlying EBITDA to US$19,974 million.

Elsewhere, Copper revenue was flat in FY 2023 at US$6,678 million with underlying EBITDA down 26% to US$1,904 million. Aluminium revenue was down 13% to US$12,285 million with underlying EBITDA down a sizeable 38% to US$2,282 million. Finally, Minerals revenue dropped 12% to US$5,934 million with underlying EBITDA down 42% to US$1,414 million.

Rio Tinto’s profit after tax fell 19% to US$10,058 million and its underlying earnings per share reduced 12% to US$7.25. This led to the company’s board cutting its full-year dividend by 12% to US$4.35 per share.

Management commentary

Rio Tinto’s Chief Executive, Jakob Stausholm, was pleased with the company’s performance. He said:

We are making clear progress as we shape Rio Tinto into a stronger and even more reliable company. By focusing on our four objectives, we are building a portfolio that is fit for the future – including our Oyu Tolgoi underground copper mine in Mongolia and the Simandou iron ore project in Guinea.

We have taken significant steps over the past month towards our target to halve our global Scope 1 & 2 carbon emissions this decade with agreements to contract future renewable wind and solar power for our Gladstone operations.

How does this compare to expectations?

The bad news for the Rio Tinto share price is that this result has fallen short of the market’s expectations.

The consensus estimate was for underlying EBITDA of US$24,500 million, whereas Rio Tinto delivered US$23,892 million.

On the plus side, its final dividend of US$2.58 per share was slightly ahead of expectations.

Outlook

The company is guiding to largely flat production in FY 2024.

For example, iron ore shipments are expected to be 323Mt to 338Mt (from 331.8Mt), Aluminium is expected to be 3.2Mt to 3.4Mt (from 3.3Mt), and copper is expected to be 660kt to 720kt (from 620kt).

One thing that is expected to increase is the company Pilbara iron ore unit cash costs. It is guiding to a cost of US$21.75 to US$23.50 per tonne (from US$21.50).

The Rio Tinto share price is flat over the last 12 months.

The post Rio Tinto share price on watch following FY 2023 earnings miss appeared first on The Motley Fool Australia.

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More reading

• Why Corporate Travel Management, Iress, Rio Tinto, and Woolworths shares are crashing
• Rio Tinto shares tumble despite massive renewable power agreement
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
• Buy Rio Tinto and this ASX dividend stock
• Which major ASX mining share will pay the biggest dividend this year?

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.

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