Here's the Fortescue dividend forecast through to 2026

Analysts predict continuing strong dividends in 2024 but the outlook is significantly different for 2025 and 2026.

| More on:
A mature aged man with grey hair and glasses holds a fan of Australian hundred dollar bills up against his mouth and looks skywards with his eyes as though he is thinking what he might do with the cash.

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

The Fortescue Ltd (ASX: FMG) dividend declared this earnings season was by far the most impressive of the three major ASX 200 mining shares.

The interim Fortescue dividend for 1H FY24 is a fully franked $1.08 per share, which is 44% higher than the interim dividend of FY23.

That's some significantly turbocharged passive income, and it also represents one of the biggest dividend boosts of all the ASX 200 shares this earnings season.

Based on the current Fortescue share price of $25.91, the interim dividend yield is 4.17%. That's higher than the 4% average that most ASX 200 stocks pay over an entire 12-month period.

By comparison, Rio Tinto Ltd (ASX: RIO) announced a fully franked final dividend of US$2.58 per share for 2H FY23, which is up 14%. That's $3.97 in Australian currency at the time of writing.

Based on the current Rio Tinto share price of $124.96, that's a yield of 3.18%.

BHP Group Ltd (ASX: BHP) cut its interim dividend by 20%. The 'Big Australian' will pay a fully franked interim dividend of 72 US cents per share for 1H FY24, or $1.11 in Aussie terms.

Based on the current BHP share price of $44.81, that's a yield of 2.48%.

Why did Fortescue pay more?

One reason is that Fortescue's earnings were superior, in terms of growth, to BHP and Rio Tinto.

This was partly because Fortescue is an iron ore pure-play stock. Therefore, it benefitted more from the strong iron ore price.

By comparison, BHP and Rio are diversified miners. Weaker commodity prices for the other metals and minerals they dig up impacted their earnings.

What's next for the Fortescue dividend?

Of course, Fortescue and the other two major ASX 200 miners will pay another dividend later in the year.

The consensus forecast published on CommSec today is for Fortescue to pay a final dividend of $1.09 for 2H FY24.

That will mean a total full-year dividend of $2.17 per share and a total yield of 8.37%.

Analysts predict a significant dividend drop in 2025 and 2026

The Fortescue dividend forecast for 2025 is much lower at $1.495 per share.

For investors buying Fortescue shares at today's price of $25.91, the 2025 forecast dividend represents a yield of 5.77%.

For 2026, the forecast Fortescue dividend is $1.03 per share, equating to a yield of 3.97%.

Motley Fool contributor Bronwyn Allen has positions in BHP Group. 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

Man pointing an upward line on a bar graph symbolising a rising share price.
Dividend Investing

3 growing ASX dividend stocks to buy now

Analysts are expecting these stock to paying growing dividends.

Read more »

Man holding out $50 and $100 notes in his hands, symbolising ex dividend.
Dividend Investing

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

These two stocks look irresistible to me.

Read more »

Smiling business woman calculates tax at desk in office.
Dividend Investing

Turn tax return into passive income with these ASX dividend shares

These options can bring solid returns through passive income. 

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Dividend Investing

Forget term deposits, these ASX dividend shares offer ~5% to 11% yields

Analysts think these shares could be better than term deposits. Let's find out what yields they offer.

Read more »

Tax time written on wooden blocks next to a calculator and Australian dollar notes.
Tax

Tax time: Use this hack to keep the Australian Tax Office off your back

Buying dividend shares can save you paying taxes...

Read more »

Man smiling at a laptop because of a rising share price.
Dividend Investing

2 exciting high-yield ASX dividend shares I'd buy in June

These stocks have a lot to offer investors focused on income.

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

Looking for passive income amid falling interest rates? Check out this top ASX All Ords dividend stock

This high-yielding ASX dividend stock can help boost your passive income amid falling interest rates.

Read more »

A man sits in deep thought with a pen held to his lips as he ponders his computer screen with a laptop open next to him on his desk in a home office environment.
Dividend Investing

Down 34% since 2021, does this ASX dividend share still offer investors a 10% yield today?

There are a few warning signs over this stock.

Read more »