Which ASX Mining Stock Tops Dividend Yields This Year?

The financial arena is abuzz as we stand on the cusp of the earnings disclosures from three of the Australian Securities Exchange's (ASX) major mining players: BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Ltd (ASX: FMG). Set to unravel on the 20th, 21st, and 22nd of February respectively, these reports transcend mere financial snapshots, offering a profound glimpse into the dividend panorama eagerly awaited by income-focused investors.


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ASX Mining Shares: The Epicenter of Dividend Wealth

Establishing themselves as some of the most benevolent dividend contributors in the market, ASX mining shares have become a cornerstone for investors seeking reliable passive income. These seasoned, mature businesses consistently yield substantial profits, cementing their status as a preferred choice for dividend-centric investment portfolios.

The Pivotal Role of Iron Ore

The fortunes of these mining behemoths are intricately linked to the undulating movements in iron ore prices. Over the recent months, the iron ore market has undergone a tumultuous yet upward trajectory since May 2023. Escalating from around US$98 per tonne in May to an impressive over US$130 per tonne today, the surge in commodity prices foreshadows a significant impact on the impending earnings season.

Unveiling the Earnings Timeline

BHP Group Ltd (ASX: BHP)

Embarking on the earnings season, BHP is set to reveal its 1H FY24 results on the 20th of February. Beyond the raw figures, investors are eagerly anticipating the accompanying dividend announcement, poised to shape their investment strategies.

Rio Tinto Limited (ASX: RIO)

Stepping into the spotlight on the 21st of February, Rio Tinto, renowned for its robust dividends, is poised to disclose its FY23 full-year results. The market eagerly awaits insights into Rio Tinto's financial prowess, amplified by the prevailing iron ore prices.

Fortescue Ltd (ASX: FMG)

As the third pillar in this triumvirate, Fortescue is slated to share its half-year results on the 22nd of February. Undoubtedly, Fortescue's performance will contribute significantly to molding the narrative of the broader mining sector.

Dividend Projections: A Microscopic View

BHP Group Ltd (ASX: BHP)

In the preceding year, BHP shares distributed a generous $2.6143 in annual dividends, fully franked. According to the consensus forecast on CommSec, projections for 2024 hint at BHP shares yielding an annual dividend of $2.399. Anchored by the current BHP share price of $45.82, this translates to an enticing dividend yield of 5.24%.

Rio Tinto Limited (ASX: RIO)

In 2023, Rio Tinto emerged as a dividend powerhouse, delivering $5.8738 in annual dividends, fully franked. Peering into 2024, the consensus forecast predicts Rio Tinto shares will bestow an annual dividend of $7.689. Given the present Rio Tinto share price of $128.25, investors could relish a substantial yield of 6%.

Fortescue Ltd (ASX: FMG)

Famed for its strategic acumen, Fortescue dispensed $1.75 in annual dividends, complemented by full franking credits, in 2023. Forecasts for 2024 indicate a projected annual dividend of $2.132. With the current Fortescue share price standing at $28.18, this sets the stage for a robust yield of 7.57%.

Decoding the Metrics

In the realm of yields, Fortescue emerges as the frontrunner, promising a more lucrative return than its counterparts, BHP and Rio Tinto, in 2024. However, in the realm of absolute dollars, Rio Tinto takes the lead, offering a higher payout. This underscores the importance of considering both metrics when navigating the intricate landscape of investment decisions.

Conclusion

As the ASX mining titans gear up to unveil their financial tapestry, investors find themselves teetering on the edge, ready to traverse the dividend landscape. While Fortescue beckons with a promising yield, Rio Tinto commands attention with substantial dollar returns. The nuanced choice between yield and absolute dividends awaits investors, as the financial revelations promise to steer their investment trajectories.
Location: Australia

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