- Rio Tinto (NYSE:RIO) +1.7% premarket as hopes rise that stronger iron ore prices will position the company to increase its dividend payout and perhaps announce a share buyback next month.
- Iron ore, Rio's biggest earner, is selling for more than $83/metric ton, up 6% in the past two weeks following an 81% gain over 2016 and more than double the record low price of $38.30/metric ton in December 2015, which led the company to dump its policy of never cutting dividends.
- Shaw & Partners analyst Peter O'Connor thinks Rio could generate as much as $6B in free cash this year and again in 2018, setting the stage for higher returns to investors.
- Meanwhile, Rio reports 2016 Pilbara iron ore shipments of 327.6M metric tons were in-line with company guidance and up 3% Y/Y, and keeps its 2017 targets intact, expecting to ship 330M-340M metric tons of iron ore.