It's safe to say that 2024 has not been kind to Fortescue Metals Group Ltd (ASX: FMG) shares so far.
To say the least.
Now, shares in the S&P/ASX 200 Index (ASX: XJO) mining stock are enjoying a run higher in morning trade on Wednesday. After closing down 2.0% at $15.88 yesterday, shares are currently changing hands for $16.48, up 3.8%.
That compares favourably with the essentially flat performance of the ASX 200 at this same time.
But, as you can see on the chart below, the same can't be said for this calendar year.
Fortescue shares remain down a precipitous 46.0% year to date, while the ASX 200 has gained 5.0% over that same period.
Part of that selling pressure has been due to the major fall in iron ore prices, Fortescue's top revenue earner. The industrial metal kicked off 2024 trading for US$144 per tonne. Today, that same tonne is trading for US$91, a 37% decline, pressured by lower demand from China.
Investors have also been concerned over the costs of the ASX 200 miner's green energy ambitions, specifically how long it might take for those investments to start paying off. Indeed, 2024 has seen Fortescue back away from some of its more ambitious green energy projects.
Questions also remain on potential additional capex from the miner's Iron Bridge project ramp-up.
However, Fortescue does remain among the lowest-cost producers. After this year's 37% decline, the iron ore price may be trending near its lows, especially if China takes more assertive stimulus measures to spur its struggling property markets into higher gear.
So, are Fortescue shares trading for a bargain after this year's big price rout?
RBC certainly thinks so. As The Australian noted this morning, the broker raised Fortescue to an outperform rating with a price target of $20.00 per share.
That represents a potential 21.4% gain from current levels.
What's been happening with the ASX 200 miner?
Fortescue reported its full-year results (FY 2024) on 28 August.
Highlights included an 8% year on year increase in revenue to US$18.22 billion. And net profit after tax (NPAT) was up 18% from FY 2023 to US$5.66 billion.
While the final fully franked dividend of 89 cents per share was down 11% from the prior final dividend, that decline is less than the fall suffered by Fortescue shares. Meaning passive income investors are receiving a very healthy yield.
Over the full year, the ASX 200 miner paid out a total of $1.97 a share in dividends. At the current share price, Fortescue stock trades on a fully franked trailing yield of 12.0%.
