Last week mining giant Rio Tinto Limited (ASX: RIO) released its half year results for FY 2019.
In the first half of FY 2019 Rio Tinto recorded underlying EBITDA of US$10.3 billion, which was an 11% increase on the prior corresponding period. This positive result was driven by a 3% lift in gross revenue to US$21.8 billion, the widening of its underlying EBITDA margin to 47%, and of course the strong rise in iron ore prices.
On the bottom line, underlying earnings came in 12% higher than the first half of FY 2018 at US$4.9 billion and 301.5 U.S. cents on a per share basis.
Another impressive part of the result was its cash flow generation during the half. The mining giant generated a 39% lift in cash flow from operations to US$7.2 billion, leading to total free cash flow of US$4.7 billion during the half.
It was because of this that the company was able to announce mammoth cash returns to shareholders of US$3.5 billion during the half. To put that into context, these cash returns are greater than the market value of both Bank of Queensland Limited (ASX: BOQ) and NIB Holdings Limited (ASX: NHF).
The US$3.5 billion comprises a record interim ordinary dividend of US$2.5 billion, equivalent to 151 US cents per share, and a special dividend of US$1 billion, which is the equivalent to 61 US cents per share.
All up the company will be paying a total of US$2.12 per share to shareholders, which at the current exchange rate works out to be A$3.13 per share. Based on Rio Tinto's last close price, this is a generous 3.4% dividend yield from these dividends alone.
I think this is very attractive given the low interest rate environment that we are living in. But you'll need to act fast if you want to receive these dividends. Rio Tinto's shares will trade ex-dividend on Thursday August 8, before the dividends are then paid to eligible shareholders on September 19. This means you'll need to own the company's shares at the close of play on Wednesday to qualify.
It isn't just Rio Tinto that will trade ex-dividend in the near future. Janus Henderson Group PLC (ASX: JHG) shares will trade ex-dividend on August 9 and Genworth Mortgage Insurance Australia (ASX: GMA) on August 13.
