Over the last few years, the Rio Tinto Limited (ASX: RIO) dividend has been among the most generous on the Australian share market.
The mining giant has been able to reward shareholders with bumper dividend payments thanks to its world class operations and favourable commodity prices.
For example, in FY 2021, Rio Tinto paid total dividends per share (including special dividends) of US$5.61. Based on current exchange rates, this equates to A$8.30 per share, which represents a sizeable fully franked 8.7% dividend yield today.
In FY 2022, the market is expecting a similarly generous dividend to be paid by the mining giant.
According to a note out of Goldman Sachs, its analysts expect the company to declare a final dividend of US$2.23 per share in February. This will bring its full year dividend to a fully franked US$4.90 per share or A$7.25 per share.
Based on the current Rio Tinto share price, this will mean a yield of 7.6% for investors for the 12 months.
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What will the Rio Tinto dividend be in 2023?
The good news for investors is that Goldman Sachs is expecting the Rio Tinto dividend to increase in FY 2023.
It is forecasting a fully franked US$5.10 per share dividend for the period. At current exchange rates, this will mean a fully franked A$7.55 per share dividend for shareholders. This equates to another generous yield of 7.9%.
In addition, the broker sees decent upside ahead for the Rio Tinto share price. Goldman currently has a buy rating and $121.50 price target on the miner's shares.
This suggests that the company's shares could rise over 27% from current levels over the next 12 months. Add in the dividends during that time and you're looking at a total potential return in the region of 35%.
