I wouldn't buy just any beaten-down S&P/ASX 200 Index (ASX: XJO) dividend share to secure a lifelong passive income.
That's because I believe that some of the ASX companies that have come under selling pressure over the past year, who shall remain nameless in this article, are likely to see their share prices fall significantly further before finding support.
Even worse, from a passive income perspective, these stocks may also scale back or even suspend their dividends.
This brings us to a top-notch ASX 200 dividend share that's down 19.21% over the past 12 months, which I think is approaching oversold territory. And one I expect will continue to reward investors with a reliable, outsized passive income stream.
Namely, Fortescue Metals Group Ltd (ASX: FMG).
What's been happening with Fortescue shares?
Fortescue shares closed down 2.89% yesterday, ending the day at $16.82 apiece.
That came as the iron ore price, Fortescue's top revenue earner, dropped 2.4% to US$96.20 per tonne.
Iron ore and copper prices have both been sliding in recent months. That's partly because China's steel appetite remains subdued alongside the nation's struggling real estate markets.
Investors have also favoured their sell buttons amid concerns over the costs of some of Fortescue's growth projects, and as the miner steps back from some of its more ambitious green hydrogen goals.
However, with the goal of tapping this ASX 200 dividend share for life-long passive income, I think the 19% share price retrace offers a potential long-term bargain entry point.
Before we look at the numbers, bear in mind that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.
But as I said, I think that long term, Fortescue's dividends won't disappoint investors buying at today's prices.
A high-yield, high-quality ASX 200 dividend share
Fortescue began to ramp up its fully franked dividend payments in 2019. Payouts hit all-time highs in 2021 amid soaring commodity prices.
With that said, the payouts over the past 12 months have certainly not been disappointing.
Fortescue paid a final, fully franked dividend of $1.00 a share on 28 September. The ASX 200 dividend share then delivered an interim dividend of $1.08 a share on 27 March. Notably, the interim dividend was up 44% year on year, a trend I like to see.
Over the full year then, Fortescue paid a total of $2.08 a share in fully franked dividends.
At yesterday's closing price of $16.93, Fortescue shares trade on a juicy, fully franked trailing dividend yield of 12.3%.
Try getting that from your deposit account!
As for the upcoming payout from this incredible ASX 200 dividend share?
We'll know soon enough.
Fortescue reports its full-year financial results (FY 2024) on 28 August.
