Hoping to bag the Fortescue dividend? You better be quick!

It's almost payday for Fortescue shareholders.

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Miner holding cash which represents dividends.

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It won't be long until the next Fortescue Ltd (ASX: FMG) dividend is paid to shareholders.

So, if you want to receive it on payday, you'll have to take action soon if you don't already own the iron ore miner's shares.

The Fortescue dividend

Last week, Fortescue released its half-year results and reported a 21% increase in revenue increased to US$9.5 billion and a 41% jump in net profit after tax to US$3.3 billion.

Also growing strongly was its free cash flow, which increased by 68% to US$2.66 billion for the half.

The key driver of this was of course a strong iron ore price. The average realised price received was up 24% on the prior corresponding period to US$108.19 per dry metric tonne.

In light of this strong financial performance, the Fortescue board elected to increase its fully franked interim dividend by 44% to A$1.08 per share.

Based on the latest Fortescue share price of $27.66, this dividend alone equates to a generous 3.9% dividend yield.

When is payday?

Fortescue is planning to reward its shareholders with its interim dividend next month on 27 March.

If you want to receive this payout, you will need to be a Fortescue shareholder before its shares trade ex-dividend on Wednesday 28 February. This effectively means you need to be on the mining giant's share register at the close of play on Tuesday to qualify.

That's because the rights to a dividend are settled once a share goes ex-dividend. If you were to buy shares after that point, the dividend rights would go to the seller of the shares on payday even though they don't have them in their portfolio anymore.

Should you buy Fortescue shares?

Goldman Sachs appears to believe that investors should take their money and run.

Last week, its analysts put a sell rating and $19.60 price target on its shares. This implies a potential downside of 26% for investors over the next 12 months.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

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