How does the Rio Tinto dividend stack up against what BHP is offering?

How do Rio's latest dividends compare to arch-rival BHP?

| More on:
Man looking amazed holding $50 Australian notes, representing ASX dividends.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the blockbuster reports this earnings season was from the 'big dog' of the ASX, BHP Group Ltd (ASX: BHP). But BHP's fellow ASX 200 miner Rio Tinto Limited (ASX: RIO)? Not so much.

BHP revealed its full-year results for FY22 back on 16 August, and they certainly caused quite a stir. The BHP share price leapt more than 4% that day and was almost 10% higher by the end of last week. The savage selling we have seen over this week has brought the mining giant back to earth somewhat, but we can still come to the conclusion that investors loved what the miner had to say.

No doubt this was assisted by BHP's dividend announcement. The Big Australian declared a final dividend of US$1.75 per share. That's 12.5% lower than the monstrous final dividend of US$2 per share that we saw last year, but it still makes BHP's previous payouts before that pale in comparison.

But how does this stack up against Rio Tinto, BHP's largest mining rival on the ASX? Rio was one of the first ASX 200 shares out of the gate this reporting season, delivering its half-year results back on 27 July.

So what did Rio have to say in the dividend department last month?

How do Rio's dividends stack up against BHP?

Well, this might be the reason why investors were talking about the BHP dividend, and not Rio's.

Rio Tinto announced an interim dividend of US$2.67 per share. Unlike last year, the company did not declare a special dividend to go along with it. This dividend represents a nasty 24.7% drop from last year's payout, or around 50% if you include the special dividends.

So where does this leave the Rio Tinto dividend today compared to BHP?

Well, If we take Rio's last final dividend and special dividend with this latest interim dividend, we get a total of $10.47 per share in dividend payouts. This works out to represent a dividend yield of 11.05% on current pricing. That's 10.14% without including the special dividend.

In contrast, BHP's last two dividends (including the latest final dividend) give the miner a dividend yield of 11.34% at current pricing.

So in terms of raw yield, BHP shares are pipping BHP at the present share pricing. But take this with a grain of salt, given the number of moving parts here. It can be fairly concluded that both of these mining giants have a lot to offer investors when it comes to dividend income right now.

Motley Fool contributor Sebastian Bowen 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.

More on Dividend Investing

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Buy these high-yield ASX shares for major passive income in 2025 and beyond

Let's see why analysts think these shares could be great buys for income investors.

Read more »

A happy elderly woman smiles and cheers as she looks at good investment news on her laptop.
Dividend Investing

2 ASX dividend champions that never cut payouts

These two dividend stocks have consistently rewarded investors. 

Read more »

Happy couple enjoying ice cream in retirement.
Dividend Investing

Aiming for rock-solid retirement income? I'd buy these two ASX shares

These stocks offer compelling levels of income for retirees.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Dividend Investing

Invested in ASX MOAT or other VanEck ETFs? It's dividend day!

Show us the money!

Read more »

A couple working on a laptop laugh as they discuss their ASX share portfolio.
Dividend Investing

Here are 2 ASX income stocks with yields above 7%

These businesses are providing investors with significant income.

Read more »

Man holding fifty Australian Dollar banknote in his hands, symbolising dividends, symbolising dividends.
Dividend Investing

Want passive income? Check out these ASX dividend shares

Analysts think these shares could be perfect for passive income investors.

Read more »

A couple stares at the tv in shock, with the man holding the remote up ready to press a button.
Dividend Investing

Why Macquarie expects this high-yielding ASX All Ords stock to charge higher AND boost its dividends

Looking for a quality ASX dividend share with strong growth potential? Read on!

Read more »

A miner in a hardhat and high visibility clothing makes a thumbs up symbol.
Resources Shares

4 reasons to buy Rio Tinto shares today

A leading expert forecasts strong growth potential for Rio Tinto shares.

Read more »