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Rio Tinto Ltd (ASX: RIO), renowned for its generous dividends, is catching the eye of income investors as the iron ore price surpasses expectations and concerns about copper supply scarcity emerge. This outlook is particularly noteworthy within the context of ASX mining stocks. Analysts at Goldman Sachs are optimistic about another substantial dividend payout from the mining giant in 2024. Investors in ASX mining stocks, especially those considering income generation, may find Rio Tinto's dividend potential and the factors influencing it to be of significant interest.
Rio Tinto's financial year runs from January to December, and with the FY 2023 final dividend announcement imminent, Goldman Sachs predicts a dividend of US$2.51 per share, bringing the full-year dividend to US$4.28. This represents an almost 3% fully franked dividend yield for investors.
Encouraged by production growth and robust commodity prices, Goldman Sachs anticipates a rise in the Rio Tinto dividend to US$4.45 per share in FY 2024, translating to A$6.78 per share in local currency. If realized, this projection would offer income investors a fully franked dividend yield of 5.25% for the financial year.
Looking ahead to FY 2025, the broker envisions continued dividend payouts, forecasting a fully franked US$4.16 per share dividend. In Australian dollars, this amounts to A$6.34 per share, delivering a fully franked dividend yield of 4.9% based on the latest Rio Tinto share price.
In addition to the positive dividend outlook, Goldman Sachs sees modest upside potential for Rio Tinto shares in 2024, assigning a buy rating and a $137.70 price target. This reflects the broker's optimistic outlook on the mining company's performance.
Investors seeking income opportunities in the resources sector may find Rio Tinto's projected dividends and growth prospects appealing, making it a stock to watch in the upcoming financial year.
