Rio Tinto Dividend Projection Until 2026

Rio Tinto Ltd (ASX: RIO) has long been a favored choice for income investors, and the allure lies in its consistent ability to generate substantial free cash flow. This financial prowess allows the mining giant to generously reward its shareholders with dividends, often surpassing the market average.

A Glimpse into the Recent Results

Post the release of Rio Tinto's 2024 full-year results, a promising dividend outlook emerges. The board announced a fully franked final dividend of US$2.58 per share (A$3.96 per share), reflecting an impressive 14.7% increase from the previous year. The full-year dividend stands at US$4.35 per share (A$6.67 per share), resulting in yields of 3.2% for the final dividend and 5.4% for the year, based on the latest Rio Tinto share price. Investors interested in ASX Dividend Stocks should take note of Rio Tinto's positive dividend performance.

What Lies Ahead

For income investors, the anticipation is high for even more significant dividends in the coming years. According to analysts at Goldman Sachs, the forecast for FY 2024 includes a modest increase to US$4.39 per share (A$6.73 per share), projecting an enticing fully franked 5.45% dividend yield.

Projected Growth in FY 2025

Looking further into the future, Goldman Sachs anticipates a more substantial increase in FY 2025, with the miner expected to pay out US$4.61 per share (A$7.07 per share). If these projections materialize, investors could enjoy a robust yield of 5.7%.

FY 2026 Outlook

While there's a slight adjustment projected for FY 2026, with a trimmed dividend of US$4.55 per share (A$6.98 per share), the attractiveness remains intact, offering a fully franked 5.65% dividend yield.

Analyst Confidence

With a buy rating and a $138.30 price target on Rio Tinto's shares, Goldman Sachs expresses confidence in the company's future performance and dividend potential.

Conclusion

In conclusion, Rio Tinto continues to be a beacon for income investors, with its consistent track record of delivering substantial dividends. The positive outlook for increasing dividends in the upcoming years, as projected by analysts, adds a layer of excitement for those eyeing sustainable returns from this mining giant.