As one of the biggest payers of dividends on the Australian share market, Rio Tinto Ltd (ASX: RIO) shares are a popular option for income investors.
And with the iron ore price currently trading at higher than expected levels and copper supply starting to look scarce, another bumper dividend could be on the way in 2024.
But just how big could the Rio Tinto dividend be next year? Let's take a look at what analysts at Goldman Sachs are forecasting from the mining giant.
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What is the forecast for the Rio Tinto dividend in 2024?
Firstly, it is worth noting that Rio Tinto's financial year runs from January to December. This means that it will shortly declare its final dividend for FY 2023.
Goldman Sachs is expecting Rio Tinto to be in a position to pay out US$2.51 per share, which will bring its full-year dividend to US$4.28. The former represents a fully franked dividend yield of almost 3% for investors.
The good news is that thanks to production growth and commodity price strength, Goldman is expecting the Rio Tinto dividend to increase to US$4.45 per share in FY 2024. This equates to A$6.78 per share in local currency.
If this forecast proves accurate, it will mean a fully franked 5.25% dividend yield for income investors in FY 2024.
But the dividends won't stop there. If you're willing to hold onto its shares for longer, then the broker believes you will receive a fully franked US$4.16 per share dividend in FY 2025.
This is the equivalent of A$6.34 at current exchange rates and represents a fully franked 4.9% dividend yield based on the latest Rio Tinto share price.
Goldman also sees a modest upside for the miner's shares in 2024. It has a buy rating and a $137.70 price target on them.
