Everything you need to know about the trimmed-down Fortescue dividend

How much is Fortescue paying to shareholders?

| More on:
An older woman with grey hair and wearing glasses looks at her laptop screen with her hand outstretched to demonstrate that she doesn't understand what she is reading

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 are down 4.58% to $18.96 following the release of the company's FY 2022 results this morning
  • The board declared a final dividend of $1.21 per share, representing a 43% reduction on the prior corresponding period
  • The ex-dividend date falls next Friday, with payment set for 29 September

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%.

Motley Fool contributor Aaron Teboneras 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 women cheers with clenched fists having read some good news on her laptop.
Dividend Investing

3 excellent ASX dividend shares to buy now

Analysts say that these shares are in the buy zone right now for income investors.

Read more »

Woman relaxing on her phone on her couch, symbolising passive income.
Dividend Investing

Here's how much passive income I'd get if I invested $20,000 in Westpac shares now

A $20,000 investment in Westpac shares could deliver some welcome additional passive income.

Read more »

Three women cruise along enjoying ice-creams in the sunshine.
Dividend Investing

Passive income powerhouses! 3 ASX shares I'd consider buying for rising dividends

Here are three ASX dividend shares that I think are worth considering today.

Read more »

Person holding Australian dollar notes, symbolising dividends.
Dividend Investing

Invest $10,000 in this ASX dividend stock for $550 per year in passive income

Big returns and passive income could be on the cards for investors according to Morgans.

Read more »

Smiling woman with her head and arm on a desk holding $100 notes out, symbolising dividends.
Dividend Investing

Buy BHP and these ASX dividend shares

Analysts think these income options would be great picks this month.

Read more »

a man sits at his computer screen scrolling with his fingers with a satisfied smile on his face as though he is very content with the news he is receiving.
Dividend Investing

Buy these excellent ASX 200 dividend shares for very juicy yields

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

Read more »

Happy woman holding $50 Australian notes
Dividend Investing

10 ASX shares that have raised dividends for a decade

Here's the list of 10 ASX dividend shares with an unbeatable track record.

Read more »

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

2 ASX dividend shares offering over 5% yield

Grab a cuppa, get comfy, and let’s dive into the exciting world of dividends Down Under.

Read more »