Reinvesting your Fortescue dividends? Here's what you need to know

The company has revealed the allocation price for its final dividend under its dividend reinvestment plan.

| More on:
A happy construction worker or miner holds a fistful of Australian dollar notes.

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

sdf

Key points

  • Fortescue has revealed shares issued under its dividend reinvestment plan will be priced at $17.737 for its upcoming $1.21 final dividend 
  • That means investors participating fully in the plan will receive one new share for every 14.65 shares they already own 
  • The dividend is set to be paid out in two weeks' time 

Fortescue Metals Group Limited (ASX: FMG)'s $1.21 per share final dividend is only weeks away from landing in shareholders' accounts.

And the company has announced exciting news for those not interested in receiving the offering in cash.

Let's take a look at the latest announcement from the S&P/ASX 200 Index (ASX: XJO) mining favourite.

The Fortescue share price is trading at $17.97 at the time of writing.

Reinvesting your Fortescue dividends? Read this

Fortescue has revealed the allocation price for its dividend reinvestment plan (DRP), allowing investors to receive their final dividend in the form of additional shares.

The DRP will be priced at $17.737 this time around.

That means shareholders who pledge the entirety of their promised dividends to the plan will receive one new share for every 14.65 shares they already hold.

Any remaining dividends unable to make up the value of a whole share will be retained by the company. They will then go towards the DRP with the next dividend.

The allocation price represents the average of the daily volume weighted average market price of all Fortescue shares traded on the ASX over the five sessions from 8 September.

The company declared a $1.21 per share, fully franked final dividend last month. That was 43% less than it offered shareholders at the end of financial year 2021.

The final dividend brought its full-year payout to $2.07, representing a payout ratio of 75% of its net profit after tax (NPAT) – which came in at approximately US$6.2 billion.

Fortescue shares traded ex-dividend on 5 September.

Of course, shareholders who opt into the DRP are still eligible for franking credits attached to the dividend. They will also dodge fees normally associated with increasing their stake in the company.

Fortescue will pay out its final dividend in two weeks' time. Shares issued under the DRP are expected to go out that same day.

Motley Fool contributor Brooke Cooper 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

A mature woman holds a plate of cake and licks her thumb.
Dividend Investing

Want a 5% yield from US stocks like Amazon? Buy this ASX dividend share

It's possible to have your cake and eat it too.

Read more »

Man looking amazed holding $50 Australian notes, representing ASX dividends.
Dividend Investing

5 top ASX dividend shares to buy next week

Analysts have good things to say about these shares. Let's see what they offer.

Read more »

Young businesswoman sitting in kitchen and working on laptop.
Dividend Investing

Where I'd invest $5,000 into ASX dividend shares

I think these stocks are appealing options.

Read more »

Happy man holding Australian dollar notes, representing dividends.
Dividend Investing

Analysts say these ASX 200 dividend shares are top picks

Let's see why they are feeling bullish about these income options.

Read more »

Clock with post it as a reminder of Tax Time
Dividend Investing

Turn your tax return into passive income with these ASX dividend shares

These are some high paying dividend shares I’m keeping an eye on. 

Read more »

Middle age caucasian man smiling confident drinking coffee at home.
Dividend Investing

These ASX dividend stocks offer 6%, 8% and 11% yields

Analysts are forecasting big yields from these buy-rated stocks.

Read more »

A man and woman sit next to each other looking at each other and feeling excited and surprised after reading good news about their shares on a laptop.
Dividend Investing

5 fantastic ASX ETFs to buy in June with $10,000

Let's see why these funds could be good picks.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
REITs

2 ASX REITs announcing new dividends today

Money, money, money!

Read more »