Today is pay day for Rio Tinto Limited (ASX: RIO) shareholders.
This morning the mining giant paid its $5.17 per share fully franked dividend to eligible shareholders.
While many investors will use these funds as a source of income, others may want to invest it back into the share market.
If you're in the latter group, then you might want to consider buying the ASX shares listed below. Here's why they are highly rated:
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Coles Group Ltd (ASX: COL)
If you're looking for more dividends, then you might want to take a look at this supermarket operator.
Coles has been a consistently strong performer since its demerger from Wesfarmers Ltd (ASX: WES). This has been driven by its strong market position, increasing penetration of own brand products, and its defensive qualities. The latter was on display for all to see during the pandemic.
And while trading conditions are now returning to normal after 12 months of heightened demand, Coles remains well-placed for the long term. This is thanks to its Refreshed Strategy and focus on automation.
Goldman Sachs is a fan of the company. It currently has a buy rating and $20.70 price target on its shares and is forecasting a 62 cents per share dividend in FY 2021. Based on the current Coles share price of $15.74, this represents a fully franked 3.9% yield.
SEEK Limited (ASX: SEK)
Another option for investors to consider investing their Rio Tinto dividends into is SEEK.
It is the dominant job listings company in the ANZ region and has a number of growing international businesses.
While job listings came under pressure during the pandemic, they have bounced back incredibly strongly in recent months. In fact, recent metrics point to new ANZ listings reaching their highest levels in over a decade.
This bodes very well for SEEK given its leadership position in the local market. For example, at the end of December SEEK ANZ had 16 million candidate profiles, 35 million monthly visits, and 160,000 active hirers. This led to the company having almost a third of all placements in the region, which is five times greater than its nearest competitor.
UBS is positive on the company. It currently has a buy rating and $32.00 price target on its shares.
