Everything you need to know about the 89 cents Fortescue dividend

Let's dig into the details of the next payment.

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Shareholders will soon be getting a sizeable Fortescue Ltd (ASX: FMG) dividend after the ASX mining share reported its FY24 result.

For the 2024 financial year, the company announced revealed revenue growth of 8% to US$18.2 billion, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 7% to US$10.7 billion, underlying net profit after tax (NPAT) rose 3% to US$5.7 billion and NPAT grew 18% to US$5.7 billion.

Profit is the key financial measure for dividends because accounting profits are what companies use to fund dividends.

Fortescue dividend

The Fortescue board of directors declared a final dividend per share of 89 cents, which was a year-over-year reduction of 11%. This brought the FY24 full-year dividend to A$1.97, which was 13% higher than the annual payout in FY23.  

Fortescue said the total dividends declared for FY24 represented a dividend payout ratio of 70% of FY24's net profit. The miner said its payouts were consistent with its dividend policy to pay between 50% to 80% of the full-year underlying net profit.

At the current Fortescue share price, the final dividend amounts to a fully franked dividend yield of approximately 4.75% and a grossed-up dividend yield of 6.8%.

Important dates

The first date investors need to know is the ex-dividend date, which is the cut-off point for when investors miss out on the upcoming dividend. Investors need to own shares before the ex-dividend date to be entitled to the payout.

Fortescue announced that the ex-dividend is Wednesday, 4 September 2024, so interested investors need to own shares by the end of trading on Tuesday, 3 September 2024.

The upcoming Fortescue final dividend is expected to be paid on 27 September 2024, so shareholders have less than a month to wait.

Investors have the option to use the dividend reinvestment plan (DRP) to receive Fortescue shares rather than cash. They must activate the DRP by Friday, 6 September 2024, at 5pm.

Fortescue share price snapshot

Since the start of 2024, Fortescue shares have fallen by more than 36%. In the calendar year to date, the S&P/ASX 200 Index (ASX: XJO) has risen by 5%, so Fortescue shares have underperformed by more than 40%. At the time of writing, shares in the miner are down $1.66% at $18.32.

For the 2025 financial year, the company is guiding for iron ore shipments of between 190mt to 200mt, including 5mt to 9mt for Iron Bridge.

Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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