Everything you need to know about the trimmed-down Fortescue dividend

How much is Fortescue paying to shareholders?

| More on:
An older woman with grey hair and wearing glasses looks at her laptop screen with her hand outstretched to demonstrate that she doesn't understand what she is reading

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Fortescue shares are down 4.58% to $18.96 following the release of the company's FY 2022 results this morning
  • The board declared a final dividend of $1.21 per share, representing a 43% reduction on the prior corresponding period
  • The ex-dividend date falls next Friday, with payment set for 29 September

The Fortescue Metals Group Ltd (ASX: FMG) share price is backtracking today amid a broader slump across the ASX.

This comes as investors sparked a sell-off on Wall Street following hawkish comments from Federal Reserve chair Jerome Powell.

Fortescue shares are down 4.58% to $18.96 despite the company dropping its highly anticipated full-year results this morning.

The mining giant delivered a record operational performance, achieving the second highest annual profit in its history.

However, the board decided to slash its final dividend by 43% which appears to have disappointed investors.

Let's take a closer look at the details surrounding the company's latest dividend.

Fortescue share price sinks amid dividend cut

On the back of the company's FY 2022 result, the board elected to cut its fully franked final dividend to $1.21 per share.

Fortescue achieved a solid operational performance but its financial scorecard was considerably lower than for the prior corresponding period.

Revenue plunged 22% to US$17,390 million due to the fall in the iron ore benchmark price and average price realisation.

In addition, C1 costs surged by 14% to US$15.91/wet metric tonne (wmt) because of increases in diesel prices, labour rates, and other consumables.

On the bottom line, Fortescue reported a decrease of 40% in net profit after tax (NPAT) to US$6.2 billion.

This led the board to significantly lower the final dividend, bringing the total dividends declared for FY 2022 to $2.07 per share.

Nonetheless, the full-year dividend is at the upper end of the company's dividend policy, representing a payout ratio of 75% of NPAT.

In line with its capital allocation framework, Fortescue's policy is to maintain a payout ratio of 50% to 80%.

The ex-dividend date for the final dividend is 5 September. This means you have until next Friday to buy Fortescue shares to secure the upcoming dividend.

If you manage to add them to your porfolio in time, you'll receive payment on 29 September.

Furthermore, you may wish to opt in to the company's dividend reinvestment plan (DRP).

The last date to participate in the DRP is Wednesday 7 September.

There's no DRP discount and the reinvestment price will be decided upon the volume weighted average price (VWAP) between 8 September to 14 September.

Based on today's price, Fortescue commands a market capitalisation of $58.5 billion and has a dividend yield of 14.95%.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Two smiling work colleagues discuss an investment or business plan at their office.
Dividend Investing

Analysts say these ASX dividend shares are top buys

Here's what sort of yields they are expecting from these shares.

Read more »

Two elderly men laugh together as they take a selfie with a mobile phone with a city scape in the background.
Dividend Investing

Forget term deposits and buy these ASX dividend stocks

Analysts think these stocks could be buys for income investors.

Read more »

A woman sits on sofa pondering a question.
Dividend Investing

Do Fortescue shares beat the big banks for dividend income?

Is Fortescue's 10%-plus dividend yield too good to pass up?

Read more »

A mining worker wearing a white hardhat and a high vis vest stands on a platform overlooking a huge mine, thinking about what comes next.
Dividend Investing

BHP shares have fallen out of the global top 20 dividend payers. Here's why

Global dividends continue to climb.

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Dividend Investing

Buy these impressive ASX dividend shares for market-beating returns

Analysts are tipping these shares to provide great yields and major upside.

Read more »

Man jumping in water with a floatable flamingo, symbolising passive income.
Dividend Investing

Why I'd buy these top ASX dividend shares before the end of 2025

Now could be the right time to buy these dividend stocks.

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Dividend Investing

Brokers say these ASX dividend stocks are buys right now

Income investors might want to check out these buy-rated stocks this week.

Read more »

$100 Australian notes on top of each other.
Dividend Investing

These buy-rated ASX dividend stocks offer 7%+ yields

Analysts expect these buy-rated stocks to provide income investors with big yields.

Read more »