The dividend is expected to rise by 11% this year, for a yield of 3.5% on today’s price, and by another 11% for 2014 to yield 3.9%. Of course, forecasts for two years ahead are always pretty tentative, but it’s still nice to see strong projections. It’s also good to see a big majority of analysts tipping Rio Tinto plc (ADR) (NYSE:RIO) (LSE:RIO) as a buy.
All told, what we have here is a company in the down phase of a cyclical industry, and one of the most diversified in its sector — it’s not dependent on the price of one specific commodity, as some of its rivals are. The group is unearthing products that the world simply cannot do without, and for which demand and prices will surely rise in the long term. And the share price is currently low by traditional measures.
That makes Rio Tinto plc (ADR) (NYSE:RIO) (LSE:RIO) a firm buy for me, and it’s why I have it in the Fool’s Beginners’ Portfolio. I think it should be on your ISA shortlist, too!
If you’re looking for other ISA possibilities that are likely to provide shareholders with strong dividends and share-price growth for years, it could well pay to examine Neil Woodford’s latest thoughts.
The article Should I Buy Rio Tinto for My ISA? originally appeared on Fool.com.
Alan Oscroft has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.
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