Earlier today the Rio Tinto Limited (ASX: RIO) share price traded ex-dividend for the mining giant's fully franked interim dividend of 216.5 cents per share.
This dividend will now be paid to eligible shareholders on Thursday September 17 2020.
While many shareholders will use this as a source of income and others may use its dividend reinvestment plan, I suspect some will look to invest the funds back into the share market.
With that in mind, here's where I would reinvest these funds:
a2 Milk Company Ltd (ASX: A2M)
If you're interested in growth shares, then you might want to consider this infant formula and fresh milk company. I'm a big fan of the company due to its very positive long term outlook. This is thanks to the growing appetite for its infant formula in China. The good news is that despite its incredible sales growth in this lucrative market, it still only has a consumption market share of 6.6%. I believe this gives a2 Milk Company a long runway for growth, which should be supported by its expanding fresh milk footprint and potential acquisitions/new product launches.
Telstra Corporation Ltd (ASX: TLS)
If you're looking for more dividends then I think Telstra would be a good option for these funds. The telco giant may have had a tough few years, but I believe its outlook is arguably the brightest it has been in a long time. This is due to the end of the NBN rollout being in sight, competition in the industry becoming more rational, and its major cost reductions. In addition to this, the arrival of 5G could be a big boost to its earnings in the coming years, especially given its leadership position. At present, I estimate that Telstra shares offer investors a fully franked 4.7% dividend yield.
