Is the Rio Tinto share price a buy for its 5% dividend yield?

Should investors dig into Rio Tinto for the dividend?

While the Rio Tinto Ltd (ASX: RIO) share price has bounced around over the last few years, the dividend yield has remained attractive.

Dividends aren't guaranteed, but the company usually tries to pay investors a sizeable payout with a rewarding dividend payout ratio.

Rio Tinto's earnings aren't as volatile as they used to be thanks to its diversified commodities strategy. It has significantly increased its exposure to copper, built a presence in lithium and continued its strong performance with Australian iron ore. Plus, it's part of a massive iron ore project in Africa called Simandou.

Let's take a look at what the dividend yield is at the current Rio Tinto share price.

Man holding a calculator with Australian dollar notes, symbolising dividends.

Image source: Getty Images

Potential dividend for FY26

The business is projected to deliver a larger dividend payout for shareholders for the 2026 financial year.

Rio Tinto's FY26 half-year result included a number of impressive growth numbers. Revenue rose 15% to US$31 billion, 28% growth of underlying operating profit (EBITDA) to US$14.8 billion, underlying earnings growth of 43% to US$6.85 billion, net profit growth of 47% to US$6.7 billion and free cash flow growth of 75% to US$3.8 billion.

All of those growth numbers allowed the business to increase its interim payout by 43% to US$2.11 per share.

Based on the dividend projection on Commsec, the business could pay a dividend yield of 3.7% excluding franking credits and 5.3% including franking credits.

That's certainly not the largest dividend yield the business has had in the last few years.

The Rio Tinto share price has risen by 55% over the past year, which has dramatically impacted the dividend yield on offer. When the share price rises by 10%, the dividend yield is reduced by a tenth, so the huge rise for the ASX mining share isn't helpful for prospective investors.

Is the Rio Tinto share price a buy?

The company had a very strong period in the first six months of 2026, which may make it seem appealing.

However, mining companies can be very cyclical because of how significantly resource prices can change and how much that can affect earnings due to the operating leverage, both positively and negatively.

If I were choosing when the right time is to invest in Rio Tinto shares, I wouldn't necessarily choose a period of strength to invest. The best buying price usually appears when commodity prices are beaten down.

But, its exposure to copper and lithium is certainly paying off for the business with strengthening prices for both of those commodities. I think Rio Tinto's earnings are on a good trajectory for the long-term.

According to Commsec, there are currently 15 ratings on the business, with seven of those being a buy and eight being a hold. While it's been a good run for existing shareholders, I think future investors are more likely to achieve market-beating returns by waiting for a lower valuation. I'd look at other ideas today.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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