Rio dividend set to fall in 2022
Rio Tinto shares fell slightly as its results were a little short of City hopes, offsetting a bigger-than-expected dividend.
Rio has now paid out almost three quarters of its earnings over the last six years, but HL Select fund manager Steve Clayton expects the going to get tougher as inflation pushes costs higher.
Clayton also notes that Rio will be spending $7.5 billion (£5.5bn) through the rest of the decade on decarbonising its operations.
He added: “The 2021 dividend is one of the largest paid by any UK company, reflecting the sheer scale of Rio’s cash generation in these market conditions.
“We expect the pay out to be lower in 2022, reflecting less favourable operating conditions, but to still represent an attractive yield to shareholders, with City analysts suggesting a pay out of around $6.95 a shares, representing a prospective yield of almost 9%.”
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