The Rio Tinto Limited (ASX: RIO) share price is heading south during morning trade on Thursday.
This comes despite the world's second-largest miner not releasing any market-sensitive news today.
At the time of writing, Rio Tinto shares are down 7.32% to $111.10 apiece.
Image source: Getty Images
Why are Rio Tinto shares falling today?
Following the company's full-year results released on 23 February, investors are eyeing Rio Tinto shares as they go ex-dividend today.
This means that investors who bought the company's shares on Wednesday or before will be eligible for the latest dividend. Anyone who purchases the shares today will miss out as the seller has secured the dividend.
Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out.
When can Rio Tinto shareholders expect payment?
For those eligible for Rio Tinto's final dividend, shareholders will receive a total payment of US$10.40 per share on 21 April. The dividend is fully franked which means that investors will receive tax credits from this.
The latest dividend is an 87% increase compared to the prior corresponding period (US$5.57 per share in FY20).
The payout figure represents an annualised dividend yield of 11.87% based on Wednesday's closing price.
Furthermore, the $16.8 billion full-year dividend represents a payout of 79% of underlying earnings. This is above management's policy of returning between 40% to 60% of underlying earnings to shareholders.
Are Rio Tinto shares a buy?
Following the company's full-year results, a number of brokers weighed in on the Rio Tinto share price.
The team at Citi downgraded its outlook on the miner's shares to "neutral" from "buy", but raised its price target by 4.3% to $120.00.
In addition, Morgans has a similar view for Rio Tinto shares, lifting its take by 9.3% to $117.00.
However, the most bullish brokers were Goldman Sachs and Macquarie. The former improved its price target by 2.1% to $132.50, while Macquarie slashed its rating by 1% to $129.00.
This represents an upside of between 6% and 20% from were Rio Tinto shares are trading today.
About the Rio Tinto share price
Despite today's drop, the Rio Tinto share price has climbed by 10% since the beginning of the year.
On valuation grounds, Rio Tinto commands a market capitalisation of around $44.5 billion, with approximately 371.22 million shares outstanding.
