Fortescue Ltd (ASX: FMG) has been of the biggest dividend payers on the ASX over the past several years, and could continue being a strong passive income option in FY26 and FY27.
Fortescue is a leading ASX iron ore share. It has benefited from the ongoing demand from China for Australia's iron ore, which has kept the iron ore price at a reasonable level, even when experts were pessimistic.
Currently, the iron ore price is sitting around US$107 per tonne, according to Trading Economics – that's a rise of 8% year-over-year. Pleasingly, higher revenue per tonne is largely extra profit for Fortescue, aside from paying more to the government.
The strength of the iron ore price may bode reasonably well for the upcoming dividend payments, in my view. Let's look at the size of the possible dividend for a $10,000 investment in Fortescue shares.
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2027 passive dividend income projection
Analysts are expecting the ASX mining share to deliver a payout reduction to FY26 compared to FY25.
In FY25, the business paid an annual dividend per share of $1.10.
According to the FY26 forecast on Commsec, owners of Fortescue shares are expected to receive an annual dividend of approximately $1.04 per share. At the time of writing, that translates into a grossed-up dividend yield of 7.4%, including franking credits.
The Fortescue dividend in 2027 (FY27) is forecast to be 80 cents per share, according to Commsec.
At the time of writing, that translates into a potential forward grossed-up dividend yield for FY27 of 5.7%, including franking credits.
Passive income from $10,000 investment
If someone bought, or already owns, $10,000 of Fortescue shares, then an investor can look forward to hundreds of dollars of passive income in 2027, even though it's suggested the payout could decline.
At the current Fortescue share price, a $10,000 investment could unlock $570 of annual passive income in 2027, including the franking credits.
Is the Fortescue share price a buy?
Analysts certainly don't seem optimistic about the ASX mining share to deliver compelling returns at the current valuation.
Commsec notes that there are 17 current recommendations on Fortescue shares. Only one of those is a buy rating. There are also nine hold ratings and seven buy ratings.
In other words, professional investors don't think the miner is a buy right now, so it could be wise to look at other passive income opportunities.
