Fortescue Metals Group Ltd (ASX: FMG) shares are down 2.1% in afternoon trade on Thursday.
At the time of writing, shares in the S&P/ASX 200 Index (ASX: XJO) mining stock are changing hands for $25.46 apiece.
Longer-term shareholders won't have much to complain about, though.
As you can see in the chart below, shares in the ASX 200 miner remain up a healthy 15% over the past 12 months. And that's not including the two fully franked dividends.
Fortescue paid out a final dividend of $1 per share on 28 September.
Eligible passive income investors can expect the interim dividend of $1.08 per share to land in their bank accounts on 27 March. Fortescue shares traded ex-dividend yesterday, 28 February.
That equates to a full-year payout of $2.08 per share. Or a fully franked trailing yield of 8.2% at the current share price.
So, how are some ASX passive income investors earning a yield of 21.6%?
Image source: Getty Images
A supercharged yield from Fortescue shares
The answer has to do with timing.
Now, timing the market is no easy feat. Very few investors will get this right with significant consistency. And picking the bottom for ASX stocks in any particular cycle often comes down more to luck than skill.
With that said, there are times when leading ASX 200 stocks, like Fortescue shares, have been unreasonably hammered due to factors outside of their control. Factors that are likely to fade away in time, offering investors attractive entry points before the wider market shakes off its fear and sends the stock rebounding.
As legendary investor Warren Buffett says, "Be greedy when others are fearful."
An opportune time to have exhibited this greed was during the early months of the global pandemic.
As uncertainty swept across the world in 2020, Fortescue shares, like most all stocks, were heavily sold off by a cadre of fearful ASX investors.
On 27 March 2020, this sell-down saw the ASX 200 mining stock close the day trading for $9.60 a share.
Passive income investors who swallowed their fear and bought in at that bargain price will be earning the same dividends from Fortescue as every other shareholder.
Meaning these brave investors are earning a fully franked yield of 21.6% from their Fortescue shares.
Not to mention they've enjoyed a four-year share price gain of 165%!
