Rio shareholders expecting big payday

Argyle diamond mine set for sale.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Argyle, a Rio Tinto (ASX: RIO) mine is all but set for sale as analysts speculate the big miners are in for some short-term rallies on the back of asset sales and juicy dividends.

In the Kimberley region of WA, Argyle Diamond mine is being speculated as the next big asset to be sold by the mining giant. Rio is eager to impress investors as the share price has fallen in recent months, which can be attributed to potentially volatile commodity prices in years to come.

The Argyle underground mine is known for its sparkling diamonds and is worth an estimated $2.2 billion, since it recently undertook a bout of underground renovations. Although it is not up for sale yet, Rio boss Sam Walsh said the company is focusing on raising funds by selling assets, which include diamonds.

Woodside Petroleum's (ASX: WPL) 'special' dividend, will be paid to shareholders who held the stock overnight, and has prompted many resource companies to follow suite. As miners such as BHP Billiton (ASX: BHP) feel the pressure of lower expectations, investors need something more to push them back into the resources sector. BHP has already announced plans to sell some key assets as a strategy to entice investors back into the stock.

BHP, Rio and Fortescue Metals Group (ASX: FMG) are all trading at a premium and although they may not reach their recent highs anytime soon, the companies are still considered undervalued by many analysts.

It wasn't that long ago that Australians were dumping retail stocks left, right and centre. Now, less than 12 months later some of our biggest retail stocks have experienced tremendous gains, despite the high Australian dollar and the ever looming 'global uncertainty'.

Foolish takeaway

Finding stocks that fit your style of investment will help give you peace of mind. In the short term, if our big miners can offer some large dividends, it is likely the share price will rise. However, in the medium term they could drop slightly as the industry tries to establish itself with greater iron ore supplies and increased competition. Perhaps the time is now to start seriously considering whether or not mining stocks are right for your portfolio.

Not ready to take a chance on the mining sector? The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Owen Raszkiewicz owns shares in Rio Tinto.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »