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Insurance Australia Group Ltd (ASX: IAG) shares have been a favourite of income investors over the long term.

That’s because the insurance giant has a tendency to return a decent portion of its earnings to shareholders through dividends each year.

One legendary investor that has been pocketing IAG dividends for a number of years is Warren Buffett. The Oracle of Omaha’s Berkshire Hathaway business acquired a stake in the company in 2015 and then topped up its position in a capital raising in 2021.

Generating a second income from IAG shares

What if you wanted to follow in Buffett’s footsteps and generate a $10,000 second income from IAG shares? Well, it certainly is possible.

According to Citi, its analysts are expecting a 17 cents per share partially franked dividend in FY 2023.

This means that if you wanted a $10,000 passive income from its shares, you would need just under 59,000 IAG shares.

Based on the current IAG share price of $4.65, that would mean a sizeable investment of $275,000. However, if you’re willing to be patient, you could potentially make a much smaller investment.

That’s because Citi is expecting a big jump in the company’s profitability in FY 2024 to underpin the almost doubling of its dividend to 30 cents per share.

Based on that dividend, you would only need to buy 33,333 IAG shares to generate a $10,000 second income. That equates to an investment of $155,000.

The good news is that with Citi then forecasting another dividend increase to 34 cents per share in FY 2025, those 33,333 IAG shares would provide investors with another $11,300 of income the following year if its analysts are on the money with their estimates.

Incidentally, Citi also sees plenty of upside potential for the company’s shares with its buy rating and $5.70 price target. This represents approximately 22% upside and would value those 33,333 shares at $190,000. That’s a gain of $35,000 on your original investment before factoring in the dividends. Not bad!

The post How I’d generate a $10,000 second income from IAG shares appeared first on The Motley Fool Australia.

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More reading

• Why is the IAG share price sliding lower on Thursday?
• 3 ASX 200 shares trading ex-dividend before the end of this week
• Here are the top 10 ASX 200 shares today
• Why Audinate, Endeavour, IAG, and Vitura Health shares are charging higher
• IAG share price marching higher on 25% profit boost

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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Well, this Tuesday has seen a reversal of fortunes for the S&P/ASX 200 Index (ASX: XJO). After yesterday’s painful session, the ASX 200 has bounced back so far today. At the time of writing, the Index has gained a rosy 0.48%, which puts it back to just under 7,260 points.

So let’s now dive a little deeper into these market moves by taking a look at the ASX 200 shares that are presently topping the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Telstra Group Ltd (ASX: TLS)

ASX 200 telco Telstra is our first share worth a look at this Tuesday. So far today, a notable 15 million Telstra shares have been called in for trading. There’s been no news or major announcements out of Telstra today that might explain this volume.

So it’s therefore likely to be the movements of the Telstra share price itself that is to thank for this volume. Telstra shares have indeed had a bouncy day of trading.

The telco is currently up by 0.12% at $4.16 a share but swung to a temporary loss this morning at $4.12 before going as high as $4.18 a share soon afterwards. It’s probably this volatility that has resulted in so many Telstra shares changing hands.

Sayona Mining Ltd (ASX: SYA)

Next up this Tuesday we have the ASX 200 lithium stock Sayona Mining. This session has had a decent 24.21 million Sayona shares swap owners thus far. This is probably the result of Sayona’s pleasing share price gain that we’ve seen today.

At present, Sayona shares are up a robust 3.11% at 23 cents apiece. As we went through this afternoon, it’s been a rough and volatile month for this ASX 200 lithium share. But investors seem to be in a forgiving mood today, with this gain the likeliest explanation for the high volumes on display.

Pilbara Minerals Ltd (ASX: PLS)

Our third and most-traded ASX 200 share today is none other than another lithium stock in Pilbara Minerals. A hefty 30.72 million Pilbara shares have been bought and sold so far this session. Again, there’s no fresh news out of Pilbara itself. So it could be a few things that are putting this company at the top of the trading tables this Tuesday.

For one, Pilbara shares have bucked the market, and are currently down by 1.07% at $4.16 each. But there are also rumours flying around today that a very large parcel of Pilbara shares has changed hands.

Put that on top of Pilbara’s ex-dividend date for its first-ever dividend payment fast approaching, and we have a potent mix of factors that could all be driving the elevated volumes we are seeing.

The post Here are the 3 most heavily traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Looking to cash in on the inaugural Pilbara Minerals dividend? You better hurry!
• Someone just sold $250 million of Pilbara Minerals shares. Here’s what we know
• Why did the CSL share price outperform the ASX 200 in February?
• Why did ASX 200 lithium share Sayona dive 13% in February?
• Keen to pocket the boosted Telstra dividend? You’d better hurry

Motley Fool contributor Sebastian Bowen has positions in Telstra Group. 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 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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The Flight Centre Travel Group Ltd (ASX: FLT) share price is on track to end the month on a positive note.

At the time of writing, the travel agent’s shares are up 0.5% to $18.75.

If the Flight Centre share price finishes here, it will mean a monthly gain of 9.5%.

This compares very favourably to the S&P/ASX 200 Index (ASX: XJO), which is currently down 2.9% month to date.

Why is the Flight Centre share price outperforming?

On the very first day of the month, the Flight Centre share price surged higher after it released its unaudited numbers to support its capital raising.

Flight Centre revealed the more than tripling of its revenue to $1 billion thanks to a significant rebound in the travel market and a particularly strong performance from its corporate business.

And while the company’s revenue margins remain under a spot of pressure, this couldn’t stop Flight Centre from recording underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $95 million for the half. This was up from a $184 million loss a year earlier and 19% ahead of the midpoint of its original half-year guidance.

New acquisition

Also getting investors excited was news that the company has bolstered its offering with the acquisition of the Scott Dunn business for $211 million.

The company notes that Scott Dunn is a high-margin leisure business in the luxury travel segment with large average booking values and strong repeat bookings. It pulled in $199 million of total transaction value (TTV) and $51 million of revenue last year.

Commenting on the acquisition, Flight Centre’s managing director, Graham Turner, said:

Scott Dunn provides us with the opportunity to grow our leisure presence in the large UK and US luxury markets in an attractive and growing segment, while also fast-tracking our objective of developing a global luxury collection of travel brands. High-net-worth, time poor customers highly value the services of Scott Dunn as shown by their customers’ loyalty.

All in all, many in the market appear to believe the worst is now behind the company and the Flight Centre share price. Though, it is worth noting that Flight Centre shares remain one of the most shorted shares on the Australian share market.

The post How did the Flight Centre share price manage to leap almost 10% in February? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 10 most shorted ASX shares this week
• Are Flight Centre shares a buy following the ASX 200 company’s latest results?
• Flight Centre share price tumbles despite losses narrowing
• Flight Centre share price on watch as revenue triples, reaching $1b

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 Flight Centre Travel 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 All Ordinaries Index (ASX: XAO) is in the green today, gaining 0.49% to trade at 7,455.9 points, helped along by these stocks.

They’re each gaining more than 7% on the back of strong first-half earnings. Let’s take a look at what’s got the market bidding them sky-high today.

2 ASX All Ords stocks outperforming on earnings releases

Stock in All Ords neuroscience technology company CogState Limited (ASX: CGS) is roaring 12% higher this afternoon to trade at $1.58 following the release of the company’s first-half earnings.

The company’s latest results were impacted by revenue delays. It posted US$19.5 million of revenue – down 15.6% on that of the prior comparable period (pcp).

That’s expected to improve in the second half. Though, its full-year revenue is still forecast to come in 6% to 9% lower than that of financial year 2022 amid slower-than-expected trial enrolments.

Beyond its earnings, CogState also announced a $13 million on-market share buyback to be conducted within the next 12 months.

It’s also worth mentioning the CogState share price’s recent tumbles. It’s dropped 49% over the three sessions prior to today’s after a guidance update was released on Thursday.

Joining the All Ords stock in the green is peer MoneyMe Ltd (ASX: MME). Shares in the digital consumer credit business are soaring 7.5% at the time of writing, trading at 21.5 cents.

The financials company posted a 147% jump in net profit after tax (NPAT) for the first half – reaching $9 million. That’s the first time it’s posted a profit since financial year 2020.

It responded to rising rates, recessionary concerns, and tightening capital markets last half. To do so, it moderated growth, lowered operating costs, managed credit risk, raised capital, and reset its corporate debt funding arrangements.

Meanwhile, its gross revenue lifted 152% to $121 million. It expects that to come in above $220 million for the entirety of financial year 2023.

The post 2 ASX All Ords stocks rocketing over 7% on strong results appeared first on The Motley Fool Australia.

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More reading

• Why Clinuvel, Cogstate, Omni Bridgeway, and Westgold shares are sinking
• 3 ASX All Ord shares being hammered on earnings today
• Why A2 Milk, Altium, Cogstate, and Ingenia shares are sinking today
• ASX 200 jumps higher again, defying predictions the 2023 stock market rally could be about to come to a screaming halt

Motley Fool contributor Brooke Cooper 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 Cogstate. The Motley Fool Australia has positions in and has recommended Cogstate. 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 Wesfarmers Ltd (ASX: WES) share price has gone down 2.8% in February with less than two hours of trading left for the month. Significantly, it’s down 6% since 16 February 2023.

For many businesses on the ASX, February is reporting month. That means investors get to see what’s happening within businesses and it also gives management a chance to comment on how 2023 is looking for their respective companies

Wesfarmers, the owner of Bunnings, Kmart, Officeworks, and Priceline, revealed a set of numbers in the company’s FY23 half-year result that was solid, though not earth-shattering.

Earnings recap

Wesfarmers reported that revenue increased by 27%, partly thanks to its acquisition of Australian Pharmaceutical Industries (API) which owned the brands Priceline, Soul Pattinson Chemists, and Clear Skincare Clinics.

However, excluding the acquisition, Wesfarmers Health revenue only increased by 11.4%. It also reported that total earnings before interest and tax (EBIT) went up 13.4%, while earnings per share (EPS) grew 14% to $1.223.

Operating cash flow increased 26.7% to $1.97 billion, while the company’s interim dividend increased 10% to 88 cents per share.

Bunnings managed a 1.5% increase in earnings before tax (EBT) to $1.28 billion. There were two key growth standouts. Kmart Group EBT jumped 114% to $475 million, partly thanks to stores being open again after COVID restrictions. Wesfarmers chemicals, energy, and fertilisers (WesCEF) EBT jumped 48.6% with strong demand for commodities, leading to good prices for WesCEF.

Did the outlook affect the Wesfarmers share price?

Wesfarmers is one of Australia’s leading retailers, so impacts on the wider economy can inevitably affect the ASX share.

In early February 2023, the Reserve Bank of Australia (RBA) decided to increase the interest rate by another 25 basis points to 3.35%. Less money for households to spend could have an impact on demand for the company’s items. The RBA’s priority is to “return inflation to target”, which is in the range of 2% to 3%.

It may be that unless businesses like Wesfarmers see a bit of pain, the RBA will need to keep going.

However, Wesfarmers had some positive words about that situation:

Elevated inflation and higher interest rates are expected to impact demand in parts of the Australian economy and result in households continuing to become more value conscious. In this environment, the strong value credentials and low-cost operating models across the group’s retail businesses mean they are well positioned to meet changing customer demand as customers adjust to cost pressures.

Retail trading results in the first five weeks of the second half of FY23 have been “broadly in line” with the growth reported for the first half.

However, Wesfarmers also said that elevated cost of doing business pressures in Australia and New Zealand are expected “to persist” in the second half, including labour market constraints and costs in the supply chain.

Wesfarmers share price snapshot

Whilst February wasn’t a great month for the business, the Wesfarmers share price is still up more than 6% in 2023 to date.

The post Why did the Wesfarmers share price flop in February? appeared first on The Motley Fool Australia.

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More reading

• Wesfarmers share price higher on big Bunnings news
• Is Wesfarmers looking to sell off its remaining Coles shares?
• How much do you need in ASX shares to give up work and live only off dividend income?
• Why I’d buy Wesfarmers shares today and hold until 2030
• Why is the Wesfarmers share price dipping on Monday?

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 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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Liontown Resources Ltd (ASX: LTR) shares are pushing higher in afternoon trade.

At the time of writing, the lithium developer’s shares are up over 2% to $1.35.

Why are Liontown shares rising?

Investors appear to have been buying Liontown shares on Tuesday in response to the release of a broker note out of Morgans.

According to the note, the broker has initiated coverage on the lithium developer with a speculative buy rating and $1.96 price target.

Based on its current share price, this implies potential upside of 45% for investors over the next 12 months.

Though, given its speculative rating, it is a high-risk option and thus only suitable for investors with a higher tolerance for risk.

What did the broker say?

Morgans notes that the company is a near-term developer of Australian spodumene and believes there’s significant potential upside for Liontown shares if it can resolve its funding issues and avoid further significant cost blowouts. It commented:

LTR is an early stage developer with spodumene assets in central and southern WA. It is currently constructing the Katherine Valley (KV) project. Planned capacity is 3Mtpa – 4Mtpa (ROM tonnes) with first production expected in mid 2024. The KV project is supported by offtake agreements with several tier one customers.

The company and its flagship project have been impacted by cost increases however and additional funding will be required to complete it. We initiate with a SPECULATIVE BUY rating with potential 12-month upside of 44% to our $1.96 price target. However, we see LTR as a higher risk opportunity than its established peers.

The broker’s preferred pick in the industry remains Allkem Ltd (ASX: AKE). It has an add rating and $15.40 price target on the lithium giant’s shares. It stated:

We continue to prefer AKE amongst the lithium pure plays as we see a longer growth runway for production and greater potential valuation upside.

The post Roar! Broker initiates coverage on Liontown shares with buy rating appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares this week
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 lithium shares having such a stellar run today?
• At under 30 cents each, are these ASX lithium stocks cheap?
• Here are the 10 most shorted ASX shares this week

Motley Fool contributor James Mickleboro has positions in Allkem. 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is currently in the green by 0.28% even though the food business has just gone ex-dividend.

With the share going ex-dividend, it means new investors won’t be entitled to the FY23 half-year interim dividend that was declared.

Domino’s dividend

The Domino’s board decided to cut the interim dividend by 21 cents per share to 67.4 cents per share, which represented a cut of 23.8%.

In percentage terms, the dividend was cut by more than earnings per share (EPS) declined – EPS fell 21.8% to 82.5 cents per share.

This came after a 4% decline in network sales, a 14.3% fall in earnings before interest, tax, depreciation and amortisation (EBITDA), and a 21.3% drop in earnings before interest and tax (EBIT).

Domino’s pointed out that there was a negative impact from foreign currency exchange headwinds and other one-off costs such as spending $5.4 million on class action legal defence costs.

However, while the Domino’s share price is up slightly today, it’s down 34% over the last month, and down 30% since the result was released.

Is the outlook improving?

In the first seven weeks of the second half of FY23, Domino’s reported 4.2% network sales growth, but that includes the benefit of the Malaysian and Singapore acquisitions. Same-store sales declined by 2.2%. The business had added another 15 stores.

The company is expecting that its same-store sales growth will be below its three to five-year target.

Domino’s is also suffering from the impacts of inflation. Higher delivery pricing (including service fees and higher bundles) reduced delivery customer acquisition and retention.

It also said that customer counts “have not met expectations since December, especially in Europe and Asia”, lowering its store profitability.

The company is working through its pricing strategies, with the business balancing its ‘value equation.’

In other words, there may not be a super-quick fix to the current situation.

Domino’s share price snapshot

Over the past year, the Domino’s share price has dropped around 37%.

The post Domino’s share price lifts despite no dividend dough for new investors appeared first on The Motley Fool Australia.

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More reading

• Dividend investors: 2 ASX 200 shares for decades of passive income
• Is the Domino’s share price now at bargain-buy levels?
• Why CBA, Coronado Global, Domino’s, and St Barbara shares are dropping today
• What took a 24% bite out of the Domino’s dividend?
• Domino’s share price crashes 23% following disappointing first-half result

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 positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. 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 share market moves around a lot. We, investors, know this, since enduring the volatility of the share market is one of the hardest parts of investing. But shares going up and down have more consequences than just the balances of our investment portfolios and super funds.

It more or less determines the richest people in the world. Billionaires typically don’t keep their money in the bank. They invest in income-producing assets that compound wealth over time – no one saves their way to a billion.

Those income-producing assets could be property or private companies. But, more often than not, they are publically-listed shares. That is certainly true of the current five richest people in the world.

Elon Musk, CEO of Tesla, SpaceX, Twitter, Neuralink and The Boring Company, had an exceptionally rough year last year. Musk had the dubious honour of being the first human in history to lose US$200 billion in personal wealth last year.

This was largely driven by the collapse we saw in the Tesla share price, of which Mussk has a huge chunk of his wealth housed.

Tesla tanked by more than 65% in 2022, which led to LVMH‘s Bernard Arnault overtaking Musk as the world’s richest person in the later months of last year.

But Arnault’s spot at the top of the greasy pole wasn’t to last.

Elon Musk is back as the world’s richest person

Today, Elon has his crown back. After a brief stint of being only the world’s second-richest person, Musk has just reclaimed his gold medal. And he can thank Tesla stock, that same company that put such a big dent in his net worth last year.

While Tesla stock cratered in 2022, it has seen a shocking renaissance in 2023 thus far. Since 6 January, the Tesla stock price has risen by a whopping 85%, going from US$113 to the US$207.63 it is commanding today.

This has catapulted Musk back up to the top of the rich list. According to the Bloomberg Billionaires Index, today, Musk’s fortune stands at US$187 billion. That’s just ahead of Arnault’s US$185 billion.

Here’s a list of the top five richest people, their fortunes as they currently stand, and the companies they are associated with:

Billionaire	Fortune (US$)	Source of Wealth
Elon Musk	$187 billion	Tesla, SpaceX, Twitter
Bernard Arnault	$185 billion	LVMH
Jeff Bezos	$117 billion	Amazon
Bill Gates	$114 billion	Microsoft
Warren Buffett	$106 billion	Berkshire Hathaway

So we’ll have to wait and see how long Musk’s stint as the world’s richest person lasts this time.

The post Surging Tesla share price propels Elon Musk to world’s richest person again appeared first on The Motley Fool Australia.

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More reading

• Magnis share price rockets 23% on Tesla deal
• Boom! Why has Tesla stock rocketed 68% so far in 2023?
• ‘Lifetime lows’: Expert reckons these shares are ‘screaming buys’ right now

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon.com, Berkshire Hathaway, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon.com, Berkshire Hathaway, Microsoft, and Tesla. The Motley Fool Australia has recommended Amazon.com and Berkshire Hathaway. 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 S&P/ASX 200 Index (ASX: XJO) has returned to form on Tuesday and is pushing higher. In afternoon trade, the benchmark index is up 0.5% to 7,258.5 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Accent Group Ltd (ASX: AX1)

The Accent share price is down over 5% to $2.17. This has been driven by the footwear and fashion retailer’s shares trading ex-dividend this morning for its upcoming interim dividend. Eligible shareholders can now look forward to receiving this 12 cents per share fully franked dividend next month on 9 March.

Adbri Ltd (ASX: ABC)

The Adbri share price is down 8% to $1.69. Investors have been selling the building materials company’s shares following the release of its full-year results. Adbri reported an 8.4% increase in revenue to $1.7 billion but a 31% decline in its net profit to $77.7 million. In light of this decline and its capex requirements, the company scrapped its final dividend to conserve cash.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down 11% to $3.69. This has been driven by the release of the retail giant’s half-year results. Harvey Norman reported flat revenue, a 14.5% decline underlying profit after tax to $291.09 million, and a 35% cut to its interim dividend to 13 cents per share. The market was expecting a profit of $323 million and an 18 cents per share dividend.

Pointsbet Holdings Ltd (ASX: PBH)

The Pointsbet share price has crashed 24% to $1.10. Investors have been heading to the exits after the sports betting company released its half-year results. Pointsbet reported decent top line growth but still reported a $178 million loss for the half. This was partly driven by surprisingly poor earnings from the Australia business, which missed consensus estimates.

The post Why Accent, Adbri, Harvey Norman, and Pointsbet shares are sinking appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 stock is tanking 7% after axing its dividend
• Harvey Norman share price sinks 10% on earnings miss and big dividend cut
• PointsBet share price tumbles on $178m first-half loss
• Earnings preview: Here are the ASX shares reporting on Tuesday
• 5 things to watch on the ASX 200 on Tuesday

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 Harvey Norman and PointsBet. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Accent Group and PointsBet. 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 Limited (ASX: RIO) share price has not performed as well in February as investors would have liked. In fact, with only a couple of hours left of trading for the month, the S&P/ASX 200 Index (ASX: XJO) mining share has fallen around 9% since the start of February.

While changes to the iron ore price can have a major impact on the business, Rio Tinto shares have seen most of the fall occur after the miner reported its result.

Let’s have a look at some of the highlights from the report for the 12 months to 31 December 2022.

Earnings recap

Rio Tinto reported that operating cash flow dropped 36% to US$16.1 billion. Free cash flow declined 49% to US$9 billion. Net profit after tax (NPAT) dropped 41% to US$12.4 billion.

The underlying earnings per share (EPS) fell by 38% to US$8.20, so the ordinary dividend per share was cut by 38% to US$4.92.

With no special dividend paid for the 2022 financial year, the total dividend per share was cut by 53%.

The business finished 2022 with net debt of US$4.2 billion, a reversal of the US$1.6 billion of net cash it had at the end of 2021. It did spend US$3.8 billion on the acquisitions of Turquoise Hill Resources and the Rincon lithium project.

Rio Tinto explained that the result reflected “the movement in commodity prices, the impact of higher energy and raw materials prices” on its operations, as well as “higher rates of inflation” on its operating costs and closure liabilities. The average iron ore price was 25% lower in 2022 compared to 2021. The average copper price was 6% lower.

Looking at the mid-point of its guidance for 2023, it’s expecting iron and copper mining costs per unit to increase. Iron ore shipments are also expected to increase.

Greenfield exploration

Rio Tinto continues to look at potential new projects. It’s working in 18 countries across seven commodities and spent $253 million in 2022.

The bulk of the company’s exploration spending was focused on copper projects in Australia, Colombia, Namibia, Peru, the US, and Zambia; diamonds in Angola; and heavy mineral sands projects in Australia and South Africa.

It’s also exploring for nickel in Canada and Finland, and for lithium in all regions, with “opportunities emerging in the US and Africa”.

When will huge dividends return?

Rio Tinto’s board said the level of dividend takes into account the result for the financial year, the outlook for major commodities, the long-term growth prospects of the business, and the company’s objective of maintaining a strong balance sheet.

The board also said it expects total cash returns to shareholders over the longer term to be in a range of between 40% to 60% of underlying earnings in total through the cycle. Additional returns could be paid in “periods of strong earnings and cash generation”.

With the Rio Tinto dividend payout ratio being 60% for FY22, Rio Tinto may be suggesting there could be another dividend decrease unless resource prices keep performing in 2023.

Rio Tinto share price snapshot

While the Rio Tinto share price noticeably fell in February, it’s been relatively flat since the start of 2023 and has risen around 20% over the past six months.

The post What made the Rio Tinto share price slide 9% in February? appeared first on The Motley Fool Australia.

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More reading

• How I’d generate a $30,000 second income from Rio Tinto shares
• Why are ASX 200 mining shares ending the week in the red?
• Should I buy Rio Tinto shares given the ASX 200 miner just slashed its dividend by 46%
• Why is the Rio Tinto share price tumbling today?
• Everything you need to know about the latest Rio Tinto dividend

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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