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%.