On Thursday 15th January 2015, I bought 43 shares in the FTSE 100 Mining company Rio Tinto. The share price at the time of purchase was 2,830.28p per share. The total cost with charges included was £1,235.06.
Their average yield over the last 5 years has been below the threshold I usually invest in - 2.48%. The oil and energy sectors have experienced significant losses in share price over the last few months and Rio Tinto is no different. Their 52 week high was 3,642p per share, which is 29% higher than was at the time of purchase. Their share priced peaked back in 2008 at a whopping 5,861p per share and it plummeted to 948p just over six months later. The share price has been much more stable in recent times, although it has dropped over the last 1 yr, 3yr and 5yr period. Rio's drop in share price over the last 6 months has been less significant than some of the other Mining companies. The drop in share price has resulted in the yield increasing to 4.16% on today's prices.
The dividend payment has increased for the last 5 years, which to no surprise was just after their huge share price crash. Over the last 5 years the average dividend growth rate was 28.89%. The most recent increase was 14.97%. The dividend payment is now back on track to what it was in 2007. I'm expecting the dividend growth rate to reduce further in the upcoming years and settle below the 10% mark.
Their average dividend cover is 5.2 over the last 5 years, and for the previous financial year, the dividends were covered by 2.88.
In December I made my first investment in the mining industry with BHP Biliton. The Oil, Mining, and Energy companies have been hit with significant losses in the last 6 months, and I've wanted to benefit from these lower rates by purchases shares in massive companies. I now own shares in the two biggest mining companies in the world. I'm not planning on investing any more capital in this industry for the time being, and I'm happy to be a shareholder in these two companies for the foreseeable future.
What do you think of Rio Tinto? Are you investing in the Mining companies right now? or is there too much risk in it for you right now?
Labels: Stock Purchase