RIO currently pays one of the highest dividends in the ASX200 with a large 6.69% at current prices. But is this sustainable and why is their dividend so high? This is our RIO Dividend Report.
RIO Dividend Snapshot
|Rio Tinto Current Share Price||$109.70 / share|
|DPS (Trailing 12-Month)||$7.3|
|Gross DPS (Trailing 12-Month)||$10.47|
RIO Dividend Dates 2021
|Summary||Interim Dividend FY21||Final Dividend FY20|
RIO Dividend History Graph
RIO typically announces a dividend with the release of its half-year results in July and full-year results in March as seen in their financial calendar.
RIO Dividends are typically paid twice a year, in April (final dividend) and September (interim dividend).
RIO has paid biannual dividends every year since 2011. Including 2020 during the COVID-19 recessionary period. All dividends have been fully franked. They also offer a Dividend Reinvestment Plan (DRP).
RIO Yield Comparison
RIO’s current gross dividend yield is 9.55%. This is above the market average. At the time of writing RIO has one of the highest dividend yield within the ASX 300.
The current RIO yield of 9.55% grossed up far exceeds the Average Term Deposit rate of 0.4%
Net RIO Dividend Yields Over Time
We can see RIO’s net dividend yield has fluctuated substantially, averaging around 5-6% over the last 10-years. From this, we can RIO’s current net yield of 6.69% is slightly above the historical average
We can see the yield spike in 2018 due to a significant increase in their dividend payment. This yield tapered off slightly as the share price increased.
RIO Dividend 2021 Payout Ratio
A companies dividend payout ratio is the ratio of the total dividend sum paid out relative to the net income of the company. It is the percentage of earnings paid to shareholders in dividends.
Based on current averages RIO’s payout ratio is 67%, this is slightly higher than the boards intended dividend payout policy of between 40-60% of earnings.
In FY21 we saw RIO declare a special dividend, that is an additional dividend outside of the interim and final dividend. This special dividend totalled $2.51 per share and is to be paid with the companies interim dividend.
RIO Share Price
The share price of Rio Tinto at the time of writing is $109.7 with a market capitalisation of $40.7billion.
The share price has increased 15.36% this year, however this has actually underperformed the ASX200 benchmark over the similiar 1-year period.
RIO Dividend Policy
RIO:ASX Dividend Policy is:
- The board expects total cash returns to shareholders over the longer term to be in a range of 40 to 60 per cent of underlying earnings in aggregate through the cycle.
- Acknowledging the cyclical nature of the industry, in periods of strong earnings and cash generation, it is the board’s intention to supplement the ordinary dividends with additional returns to shareholders.
When Will My RIO Dividends be Paid?
The mining company typically announces a dividend with the release of its full year results in February and their half year results in July.
Dividends are typically paid twice a year, in April (final dividend) and September (interim dividend). Payment dates are listed on the companies financial calendar.
RIO Dividend Reinvestment Plan (DRIP)
A DRIP or dividend reinvestment plan allows investors to automatically reinvest their dividends for additional shares in the company. Using this method, the investor will still receive the franking credit and will still be taxed on the cash value of their dividend.
- In Computershare it’s as simple as going ‘my profile’- ‘Reinvestment plans’ and selecting the company and electing to participate in full or partially. That is either the entire amount or a partial amount of your dividend is reinvested.
- On Link you simply click view details of the company of interest and update it in the ‘payments and tax’ section.
For more information check out our ASX DRIP VS NON-DRIP Guide
RIO Dividend Report History