Earning monthly income from ASX dividend shares can be a good way of generating extra cash on the side.
Mining giant Fortescue Metals Group Ltd (ASX: FMG) has a strong history of paying dividends to investors.
Fortescue shares have climbed 5% in the year to date and were priced at $21.57 at last close.
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How many Fortescue shares would get you to $150 a month in dividends?
Starting with the basics, a monthly income of $150 equates to an annual income of $1800.
Fortescue has paid $1.96 worth of dividends in the past year. This consists of an interim fully franked dividend of 75 cents per share in the first half of FY23, and a final fully franked dividend of $1.21 per share in the second half of FY22.
So in order to have received $1800 ($150 a month) from Fortescue shares over the past year, investors would need to own 918 shares in the company.
At the last closing price of $21.57 per share, this would cost an investor $19,801.26.
Dividend estimate
Looking to the future, the team at Bell Potter is tipping Fortescue to pay a larger dividend in the second half of FY23.
Analysts are forecasting Fortescue to pay a fully franked final dividend of 148.8 cents per share this financial year.
If this eventuates, Fortescue would pay a total of 223.8 cents per share in dividends in the 2023 financial year.
To receive $1800 in annual income — or $150 in monthly income — from a 223.8 cents per share dividend, investors would need to own 804 Fortescue shares ($1,800 divided by $2.238).
Therefore, based on the company's last closing share price of $21.57, investors would need to invest $17,342.28 in Fortescue to generate a monthly income of $150.
Fortescue reported an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$4.352 billion in the first half of FY23, down 8.6% on the prior corresponding half.
Share price snapshot
The Fortescue share price has slipped 0.42% in the last year. However, in the past week, the company's share price has climbed 1.94%.
Fortescue has a market capitalisation of about $66.4 billion based on its last closing price.
