Fortescue Ltd (ASX: FMG) shares are an attractive option for passive-income hunting investors.
The company generates a substantial cash flow from its large iron ore operations, which means that when iron ore prices and production is strong, it can return a significant portion of its profits to shareholders through dividends.
Fortescue is also actively diversifying its business beyond iron ore and into other markets, such as copper and renewable energy, which could reduce its reliance on iron ore over the long term and strengthen its bottom line.
But what if you wanted to generate $1,000 of passive income from Fortescue shares every single month? Is it even possible? And if so, what would it entail?
Let's investigate.
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What's the latest out of Fortescue shares?
At the time of writing, the ASX mining shares are trading for $17.61. That's about 21% lower year to date and a 6% decline from this time last year.
What dividend does Fortescue pay its shareholders?
Fortescue has a strong dividend history dating back to 2011.
The miner traditionally pays its shareholders two fully-franked dividends every year, in March and September. The miner has a policy of returning 50% to 80% of its net profit after tax to shareholders as dividends.
Fortescue is due to pay its shareholders a final 46 cent per share dividend, fully franked, later this month. Combined with the 62 cent dividend paid out in March, that brings the miner's total FY26 dividend to $1.08 per share.
Current forecasts suggest that the company's FY27 total dividend per share could decline to 86.4 cents per share, off the back of falling iron ore prices.
Based on the current share price, that translates to a dividend yield of around 6.1% for FY26, and around 5% for FY27.
How many Fortescue shares do I need to generate $1,000 per month in passive income?
At the time of writing, Fortescue shares are $17.61 each.
That means, for the $1.08 per share dividend in FY26, investors would need to buy roughly 11,111 shares to generate around $1,000 per month (or $12,000 per year) in passive income.
To earn the same amount in FY27, assuming the miner pays the forecasted 86.4 cents per share dividend, investors would need to buy around 13,888 shares.
What would that cost me?
In order to buy the 11,111 Fortesce shares needed to generate the equivalent of a $1,000 per month passive income in FY26, you would need to invest around $196,000.
For the same level of passive income in FY27, investors would need to spend around $245,000 on the mining shares.
It's not a small investment, but it's one that could pay off over the long term.
And remember, you don't have to invest the full amount at once. You can slowly build your investment over time and let compound growth do the rest.
