Owning Fortescue Ltd (ASX: FMG) shares has meant big dividends over the last several years. The ASX mining share just announced its latest payout to shareholders with its HY26 results.
The company has benefited from a higher iron ore price, leading to higher profits and a larger payout.
Fortescue may be a volatile business, but shareholders are about to enjoy a significantly larger dividend than last year.
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Fortescue dividend announced
The business determines the size of its dividend based on the dividend payout ratio, so changes in profitability play a vital role in the company's dividend potential.
Fortescue reported a 23% rise in net profit, driven by a 7% increase in its iron ore sales price and a 3% reduction in production costs. This led to the earnings per share (EPS) increasing by 24% in Australian dollar terms to 95 cents per share.
The company maintained a dividend payout ratio of 65% in the first half of FY26, the same as in the first half of FY25. Its policy is to pay between 50% and 80% of the full-year underlying net profit as a dividend.
Fortescue hiked its interim dividend per share by 24% to 62 Australian cents. At the current Fortescue share price, this payment alone translates into a cash dividend yield of 3%, or 4.3% including the franking credits.
When will it be paid?
The business announced that the Fortescue dividend will be paid to shareholders on 30 March 2026.
But there's another important date to be aware of. The ex-dividend date is the cutoff date by which investors need to own Fortescue shares to be entitled to this payout. Investors need to own shares by the end of trading on the previous trading date.
Fortescue's ex-dividend date is Monday, 2 March 2026, so investors have until the end of trading on Friday, 27 February (this week) to invest and gain entitlement to the dividend.
Investors can choose to participate in the dividend reinvestment plan (DRP) if they would rather receive new Fortescue shares (with no brokerage costs) rather than receive cash.
If shareholders wish to participate in the DRP, the deadline is 5pm on 4 March 2026. That is essentially a week away, at the time of writing.
Time will tell whether the FY26 final dividend can match this, or even exceed it. It's likely to depend on what happens with the iron ore price over the next few months, which is notoriously unpredictable and volatile.
