Fortescue Metals Group Ltd (ASX: FMG) shares have been making a strong comeback.
Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed up 3.0% yesterday trading for $19.42.
For some context, the ASX 200 finished up 0.4% on Monday.
As you may be aware, Fortescue shares have enjoyed a stellar run higher since the miner released its fourth-quarter update on 24 June, revealing a record-setting three months.
Indeed, since market close on 23 June, shares are now up 33.6%.
And according to Shaw and Partners' Jed Richards, the ASX 200 miner is well placed to keep outperforming in the year ahead (courtesy of The Bull).
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Should you buy Fortescue shares today?
Citing the first reason he's bullish on Fortescue shares, Richards, who has a buy recommendation on the miner, said, "Fortescue continues to benefit from resilient iron ore prices, driven by Chinese infrastructure and demand for dam construction."
As for the second reason, he said, "The company has posted record export volumes and maintains a low cost production advantage."
Indeed, for the three months to 30 June, Fortescue achieved all-time high quarterly iron ore shipments of 55.2 million tonnes (Mt). Full-year FY 2025 shipments of 198.4Mt also notched a new record, up 4% from FY 2024.
On the cost front, the ASX 200 miner reported full-year costs of US$17.99 per wet metric tonne (wmt), down 1% year on year.
Moving on to the third reason you may want to add Fortescue shares to your portfolio, Richards pointed to the miner's sustainability efforts.
"FMG is also investing in green energy and carbon reduction initiatives, aligning with global sustainable trends," he said.
And the fourth reason this ASX 200 mining stock looks like a buy is its reliable passive income potential.
"The strong dividend yield and disciplined capital management make it a compelling buy, in my view," Richards said.
Over the past 12 months, Fortescue has paid out a total of $1.39 in fully franked dividends. At the current share price, that sees the ASX 200 mining stock trading on a fully franked trailing dividend yield of 7.2%.
Connecting the dots, Richards concluded:
I have pushed iron ore investment aggressively during the past six months, while many other analysts have been more pessimistic. With iron ore recently trading around $US100 a tonne, Fortescue offers income and growth potential.
Taking a step back, Fortescue shares are now up 6.5% since this time last year, not including those welcome dividends.
