How does the Fortescue dividend stack up against BHP and Rio?

Is Fortescue still a dividend winner in 2023?

| More on:
Australian dollar notes inside the pocket on jeans, symbolising dividends.

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 made a name for themselves in recent years by paying out massive and unprecedented dividends
  • But Fortescue's dividends peaked in 2021, and have been on the slide ever since
  • Today, the ASX 200 mining giant still offers a respectable dividend yield of over 9%

Over the past few years, Fortescue Metals Group Limited (ASX: FMG) shares have built up a reputation as one of the heavy hitters on the ASX when it comes to dividends. Fuelled by record iron ore prices, Fortescue was able to raise its annual dividend from $1.14 per share in 2019 to a record $3.58 per share in 2021.

If Fortescue kept up that level of dividend generosity, this ASX 200 miner would have a trailing dividend yield of 17.76% right now.

Alas, 2022 and 2023 so far have not been quite as kind to Fortescue investors as 2021 was.

So today, let's check out how the Fortescue dividend compares to the company's mining rivals in BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

As we've previously flagged, the Fortescue dividend has come back to earth since the highs of 2021. In 2022, the company paid out a total of $2.07 in dividends per share. And in 2023 so far, Fortescue's March interim dividend came to 75 cents per share, down from last year's interim dividend of 86 cents.

That 75 cents per share dividend, combined with last year's final dividend of $1.21 per share, gives the Fortescue share price a trailing dividend yield of 9.72% on current pricing. That comes fully franked too, as is typical with Fortescue's payouts.

How does the Fortescue dividend stack up against BHP and Rio?

Let's compare all of that to 'the Big Australian', BHP. BHP's dividend trajectory over the past few years has been similar to that of Fortescue. In 2019, BHP shares paid out $3.33 worth of dividends per share. This rose to $4.03 per share in 2021 and then to a record $4.63 in 2022.

However, BHP's interim dividend for 2023 was a major downstep from the previous year, with the miner only forking out $1.36 per share, as opposed to the $2.08 investors bagged in March 2022.

Today, BHP shares have a trailing dividend yield of 8.95%, fully franked.

Like Fortescue, Rio Tinto's dividends also peaked in 2021. We saw a similar path trodden by this ASX 200 miner, with dividends ramping up from $8.97 per share in 2019 to a record $12.77 per share by 2021 (that includes Rio's special dividends).

But 2022 saw this decline somewhat, with the miner doling out a total of $10.47 in payouts last year. 2023's final dividend also saw a drop, falling from $5.77 ($6.63 including the special dividend) in 2022 to the $3.26 we saw last month.

Today, Rio shares offer a trailing and fully-franked yield of 6.55%.

Foolish takeaway

So Fortescue is clearly the winner today when it comes to raw dividend yield. However, remember that a company's dividend yield always reflects what it has paid out in the past, not what it will pay out in the future. It's entirely possible that 2023's remaining dividends push BHP over the top of Fortescue in terms of dividend yield.

Fortescue is also far more reliant on iron ore for its earnings, whereas BHP (and Rio to a lesser extent) have a more diversified earnings base of other metals.

But there's no doubt that Fortescue, as well as BHP and Rio, have been absolute cash machines for ASX dividend chasers in recent years. It will be interesting to see what the rest of 2023 and 2024 hold in store for income investors.

Should you invest $1,000 in Telstra Corporation Limited right now?

Before you buy Telstra Corporation Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Telstra Corporation Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Sebastian Bowen 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 happy construction worker or miner holds a fistful of Australian dollar notes.
Dividend Investing

Buy Rio Tinto and these ASX dividend shares in May

Analysts expect good yields from these buy-rated shares.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
Dividend Investing

Top broker forecasts this quality ASX 200 dividend share could surge 45%!

A leading broker forecasts outsized gains ahead for this high-yielding ASX 200 dividend stock.

Read more »

A couple sitting in their living room and checking their finances.
Dividend Investing

Beat falling interest rates with these growing ASX dividend shares

Analysts think these shares could be top picks for income investors now interest rates are falling.

Read more »

Gold bars and Australian dollar notes.
Dividend Investing

How these soaring ASX 200 stocks are shaping up to be the dividend gems of 2026

With revenue surging, these ASX 200 stocks may be supersizing their dividends in 2026.

Read more »

Australian notes and coins symbolising dividends.
Industrials Shares

ASX 200 dividend stock reveals next quarterly passive income payout

The ASX 200 dividend stock announced its quarterly results and latest passive income payout.

Read more »

Animation of a man measuring a percentage sign, symbolising rising interest rates.
Dividend Investing

Forget term deposits and buy these ASX dividend stocks in May

Interest rates could be heading lower so consider these shares that analysts rate as buys instead.

Read more »

Two pink pillar candles lit and shown with a pink background, indicating rosy news for the Dusk share price.
Dividend Investing

This ASX dividend share is expected to pay a 15% yield in 2026!

This small business is predicted to pay a huge yield.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Dividend Investing

Analysts rate these top ASX dividend shares as buys this month

Income investors might want to check out these buy-rated shares.

Read more »