One of the most popular options out there for income investors is the Rio Tinto Limited (ASX: RIO) dividend.
And this for good reason. The mining giant has a tendency to share a significant amount of its profits with its shareholders. So, when times are good for this mining giant, big dividends are often declared.
With that in mind, let's take a look to see what is expected from the Rio Tinto dividend in the coming years.
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Where is the Rio Tinto dividend heading?
According to a note out of Goldman Sachs, its analysts are expecting the big dividend payments to continue in the near term.
In FY 2022, the broker is forecasting a fully franked US$4.90 (A$7.09) per share dividend. Based on the current Rio Tinto share price of $98.19, this will mean a yield of 7.2%.
It then expects this dividend to increase to US$5.12 (A$7.43) per share in FY 2023, giving investors a 7.6% yield.
Goldman is forecasting an increase to US$5.48 (A$7.95) per share in FY 2024, which would mean a fully franked 8.1% yield.
A slight reduction is forecast in FY 2025 to US$5.40 (A$7.83) per share. Nevertheless, this still means a very attractive 8% dividend yield.
Finally, its analysts are anticipating a reduction in the Rio Tinto dividend to US$3.90 (A$5.65) per share in FY 2026. This represents a 5.8% dividend yield at today's prices.
Are its shares a buy?
As well as juicy dividend yields, Goldman Sachs sees plenty of upside for the Rio Tinto share price.
It currently has a buy rating and $121.50 price target on the company's shares. This implies potential upside of 24% from current levels.
