Telstra is a favourite for investors looking for a yield-play, but a Commonwealth Bank investment research note has shown that mining major Rio Tinto is also paying up.
It’s not a surprise that Telstra has been seen as an attractive source of return.
According to the note, it has fully franked dividends, a yield of 6.2%, a 94% payout ratio and earnings certainty.
However, Rio Tinto “generated over three times more franking credits than Telstra in 2012,” according to the research.
And if Rio Tinto Boss Sam Walsh makes good on a promise to deliver an “unrelenting focus on pursuing greater value for shareholders, then RIO may return more than 3.5-times more cash to shareholders than Telstra over the next eight years — and that doesn’t include cash from asset sales.”
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