Fortescue Shareholders Face Slowing Dividend Growth
Fortescue Ltd (ASX: FMG) has been a profitable option for passive income over the past five years, leveraging iron ore price strength to boost revenue and net profit.
The ASX mining share has operating leverage when commodity prices rise, with production costs remaining relatively stable. However, this means that declining iron ore prices can have a negative impact on Fortescue's earnings.
Analysts predict a lower dividend payout in FY27, citing current iron price forecasts and foreign currency fluctuations. The potential payout for FY27 is AUD 85.9 cents per share, resulting in a dividend yield of 4.8% excluding franking credits and 6.8% including them.
An investor with $15,000 could buy approximately 836 Fortescue shares. If the projected payout is achieved, this would translate to around A$718 in cash and A$307.77 in franking credits, for a total of A$1,026 in grossed-up dividend income.