Rio Tinto is a well diversified global mining powerhouse that is second in global size, behind only BHP. The firm is dual listed on the ASX and London’s LSE. Rio operates across commodities such as Aluminium, Copper & Diamonds, Energy & Minerals, and Iron Ore. The stock prices of the big 3 miners were being swayed by the sky high iron ore pieces in recent weeks. It’s not just iron ore though, commodity prices across all the commodities that RIO mines have been soaring and the inflation data continues to push it higher. These prices mean that being a producer is the place you want to be in as the cost can be passed over to the customers. RIO as a result has been driving in the profits from this commodity supercycle that we are a part of. We believe RIO along with FMG and BHP will be the best dividend stocks going into the earnings season given the high commodity prices and their sheer strength when it comes to operations.
This morning, RIO shares, along with FMG shares, reached an all time high. RIO shares closed at $134.17 a share after a 1.47% increase. They delivered their interim results for FY21 and investors have been topping up their holdings of RIO shares in light of the bullish performance.
RIO delivered record financial results with free cash flow of $10.2 billion and underlying earnings of $12.2 billion, after taxes and government royalties of $7.3 billion. A whopping $13.7 billion net cash was generated from operating activities, it was 143% higher than the 2020 first half, mainly due to higher pricing for iron ore, aluminium and copper.
RIO increased their dividend payout to 75% underlying earnings in light of the strong performance. An interim dividend of 561 US cents per share was announced, which is equivalent to $6.1 billion. RIO also announced a special dividend of $3 billion or 185 US cents per share.
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