RIO yield 6.3% time to buy?

[minerjoe]

I don't hold Rio, but quite a bit in natural resources. That said at 6.3% I don't think I can put off Rio! It seems like more weighting into a single sector, but it's cheap for no real reason and it's well covered.

It's not been this high in a long time according to Dividend data

https://www.dividenddata.co.uk/dividend ... y?epic=RIO

Moderator Message:
Edited to correct spelling. Raptor.

[onthemove]

I don't hold Rio, but quite a bit in natural resources. That said at 6.3% I don't think I can put off Rio! It seems like more weighting into a single sector, but it's cheap for no real reason and it's well covered.

It's not been this high in a long time according to Dividend data

https://www.dividenddata.co.uk/dividend ... y?epic=RIO

Moderator Message:
Edited to correct spelling. Raptor.

Just bear in mind they scrapped their progressive dividend policy.

https://www.riotinto.com/documents/1602 ... esults.pdf

"However, with the continuing uncertain market outlook, the board
believes that maintaining the current progressive dividend policy would constrain the business and act
against shareholders’ long-term interests. We are therefore replacing the progressive dividend policy with
a more flexible approach that will allow the distribution of returns to reflect better the company’s position
and outlook"

In other words, they aren't going to attempt to 'smooth' payments in order to provide predictability; payments from one year to the next will not take into account previous years, nor will payments in any year take into account whether the board thinks they could be maintained in subsequent years.

Instead dividends will be based on what, if anything, is left after the board has retained what they feel they need in order to cover costs, etc, and re-invest in the business going forwards. And that will be whatever that will be, but it won't be an indication as to whether or not the board thinks they'll be able to pay the same next year.

[Lootman]

they aren't going to attempt to 'smooth' payments in order to provide predictability; payments from one year to the next will not take into account previous years, nor will payments in any year take into account whether the board thinks they could be maintained in subsequent years.

Instead dividends will be based on what, if anything, is left after the board has retained what they feel they need in order to cover costs, etc, and re-invest in the business going forwards. And that will be whatever that will be, but it won't be an indication as to whether or not the board thinks they'll be able to pay the same next year.

Given the volatility of commodity prices that might be considered a sound approach to take. In fact the only gold mining share listed on the S&P 500 index - Newmont Mining - had adopted a policy that dividends will be determined by movements in the price of gold itself. But they recently abandoned that policy because investors didn't like the income volatility:

https://seekingalpha.com/article/415108 ... investment

Rio has a more diversified set of assets so it is perhaps surprising that they are adopting what at least one competitor is abandoning. But at least we have a choice . .

[monabri]

The same thought crossed my mind too! I certainly will be "monitoring" the sp/ potential yield.

RIO is currently on a small % of my portfolio (1.45%) so a top up is a consideration!

( Yield 6.6% - 3649p)

[monabri]

Hot off the press!

"LONDON (Alliance News) - Rio Tinto PLC is seeking to sell its majority stake, worth GBP4.7 billion, in Iron Ore Company of Canada, Sky News reported on Wednesday."

"Sky News reported that sources close to Rio Tinto said that if the sale goes ahead, the company could use the proceeds to target smaller acquisitions."


https://www.londonstockexchange.com/exc ... 29100.html


Or they could pay a special ???

[schober]

"Or they could pay a special ???"

Unlikely! I expect they will be buying up juniors with promising exploration acreage on the TSX/TSV or ASX (mining is much easier on "Wall St" than in the real world)

GDXJ is in the doghouse! http://tinyurl.com/yaljpv7q So, it's a good time to buy; unlikely to overpay as has happened in the past (Alcan)

[monabri]

"Or they could pay a special ???"

Unlikely! I expect they will be buying up juniors with promising exploration acreage on the TSX/TSV or ASX (mining is much easier on "Wall St" than in the real world)

GDXJ is in the doghouse! http://tinyurl.com/yaljpv7q So, it's a good time to buy; unlikely to overpay as has happened in the past (Alcan)

I don't know much about GDXJ ( "VanEck Vectors") but it appears to be an ETF with holdings in 25+ baby gold miners, the majority of which seem to be 20 to 30% down year to date. So, I guess it serves as an indicator that the smaller companies are - as you suggest - having a "bad time" (in gold).

I noticed RRS (not so small) were down over 5% today (having fallen from £82 p.s to just over £50 today) so there are opportunities perhaps.

(I was joking about a special...but I'm prepared to be surprised!)

[schober]

An over view of GDXJ etf and the fundamentals of the stocks
http://www.zealllc.com/2018/gjq118fn.htm

The larger ones have a mcap of 1 - $5b ; so not that babyish! Gdxj is more of a mid tier etf than a junior one.

[Raptor]

Moderator Message:
ETFs are not part of HYP Practical. Passing mention is just acceptable. We are past that now. So please back to RIO. Thanks. Raptor