Adding Rio Tinto PLC – ADR US$ RIO

I am adding Rio Tinto  US $ ADR to my both my Income and Growth portfolios under the Materials Sector.

Rio is a major global mining company based in the UK with operations in Australia, North and South America, Europe and South Africa.

Its production includes the following:

  • copper, aluminium, diamonds, and  iron ore
  • coal and uranium
  • borax, titanium dioxide and salt

The company offers a strong balance sheet, rising operating and free cash flows.

The current dividend yield is 4.9% and the free cash flow is more than sufficient to cover the dividend with a payout of 55%.

The company has recently decided to sell its thermal coal operation and expects to receive proceeds of $2.45 billion.

Rio is a conservative way to participate in  rising commodity markets with its strong dividend and healthy balance sheet.

 

Posted in Blog Post.

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