The Fortescue Metals Group Limited (ASX: FMG) share price is up an incredible 130% over just the past year as the iron ore miner handed out $1.14 per share in fully franked dividends over the period.
On that basis alone it offers a trailing yield of 13% at today’s share price of $8.80.
Thanks to the rising iron ore price generating mountains of free cash flow for Fortescue over fiscal 2019 it has also been able to buy back around 34.8 million shares for $140 million since October 2018.
Today it announced plans to buy back up to another $500 million worth of shares over the next 12 months depending on market conditions and the iron ore price for example.
Whether a cyclical miner should be in the market buying back shares at all time highs when it has US$4 billion of gross debt on its balance sheet around 1.25x fiscal 2019’s profit is up for debate.
However, in fairness Fortescue’s management built its business on a mountain of debt and it has always been a risk taking business that has succeeded despite the doubters.
As such investors in the stock can continue to expect a bumpy ride.
If you love dividends these 3 Dividend Bets for 2020 may be a more reliable bet...
With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.
Hint: These are 3 shares you’ve probably never come across before.
They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”
We think these 3 shares offer solid growth prospects over the next 12 months. Each of these three companies boasts fully franked yields and could be a great fit for your diversified portfolio. You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."
Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!
The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.
You can find Tom on Twitter @tommyr345
The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.