Over the past few years, Fortescue Ltd (ASX: FMG) shares have been a great source of passive income.
The mining giant has been able to pay out huge dividends as it grew its production and benefited from strong demand for iron ore in China.
The latter has kept prices of the steel-making ingredient strong, even for the company's low grade iron ore.
In respect to its dividends, Fortescue has paid out the following over the last five years:
- $1.14 per share in FY 2019
- $1.76 per share in FY 2020
- $3.58 per share in FY 2021
- $2.07 per share in FY 2022
- $1.75 per share in FY 2023
That's a total of $10.30 per share, which is two and a half times the price you would have paid to buy Fortescue shares five years ago.
To put that into context, if you had invested $10,000 into the miner's shares at that point, you would have received approximately $25,000 back in passive income.
But those dividends have been paid now. What about the future? Will there be big dividends in 2024? Let's find out.
What passive income could be coming for Fortescue shares in 2024?
The good news is that iron ore prices have been very strong recently, which bodes well for Fortescue's performance in FY 2024.
For example, according to a recent note out of Bell Potter, its analysts are expecting another juicy dividend next year.
The broker has pencilled in a fully franked dividend of approximately $1.89 per share for the period. Based on the current Fortescue share price of $27.85, this implies a dividend yield of 6.8%.
This means that if you were to invest $10,000 into Fortescue's shares, it would result in a passive income of $680.
Though, it is worth noting that like most brokers, Bell Potter currently has a sell rating and a $17.37 price target on its shares. So, it is important for investors to consider its valuation before investing and not focus purely on passive income.
