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The demand for lithium has increased manifold in the recent past due to
tight supply of the white metal. While the demand for electric vehicles is on rise, the supply of
lithium remains on the lower side. Lithium is one of the major elements used in production
of batteries, which form the core of electric vehicles. The price of lithium has ballooned over
500% in the last twelve months. This is what has kept investors’ interest high in ASX-listed
lithium shares. However, there are not many ASX-listed lithium firms which are currently
paying dividends to their shareholders. In fact, most of the companies are reinvesting the cash
back into operations to meet the rising demand. As such, there are not many dividend-paying lithium
stocks on the ASX 200. Let’s look at three dividend-paying lithium stocks, including
those companies which are slowly increasing their presence in the lithium sector.
Starting with Mineral Resources.
This company provides mining infrastructure services in Australia. The ASX-listed company is
into integrated supply of goods and services and operates segments like mining,
mineral services, and processing. Its lithium projects are located at Mt
Marion and Wodgina. Mineral Resources has an annual dividend yield of 5.17%.
The company’s dividend yield received a major boost from high margin prices in its iron ore
business. The AU$11 billion company paid a fully franked final dividend of AU$1.75
on 7 September 2021. Mineral Resources is currently trading at AU$55.63 up by 2.89%.
Next, we look at Rio Tinto.
It is an Anglo-Australian multinational company, which is the world's second-largest metals and
mining corporation. The company has recently increased its exposure to lithium. It recently
signed a deal to acquire the Rincon Lithium project in Argentina for US$825 million. The
AU$39 billion company announced the highest ever dividend to its shareholders
in its half-yearly report for the financial year 2022. Rio Tinto’s board declared a US$16.8
billion full-year dividend, equivalent to 1,040 US cents per share and 79% of underlying earnings
in the first half of 2022. It includes US$6.7 billion record final ordinary dividend that is 417
US cents per share and US$1.0 billion final special dividends. It has an annual dividend yield
of 13.75%. Rio Tinto is currently trading at AU$105.14 up by 0.43%.
Lastly, we talk about, Wesfarmers.
It is an Australian conglomerate with interests predominantly in Australia and
New Zealand, operating in retail, chemical, fertiliser, industrial and safety products.
While the consumer conglomerate may not be a proper lithium share, it is slowly trying to
increase its exposure to the sector. The company has acquired Kidman Resources,
which is working in unison with Wesfarmers’ jointly owned Covalent Lithium. The AU$56
billion company, Wesfarmers, has an annual dividend yield of 3.48%. It paid a dividend
of 80 cents on 30 March 2022. Wesfarmers is currently trading at AU$50, up by 0.60%.
These stocks are growing at a rapid pace and their dividend yield
is the result of growth and Lithium prices skyrocketing
in the last 12 months. It’ll be interesting to see that how these stocks and lithium prices
fare in the near future with the onset of rising lithium demand all over the world.
Well, That’s all for now. We will be back with our Buzzing Trends show
to share the latest market insights with you. Till then,
Stay tuned with Kalkine TV for more stock, business and economy related hot trends.