Hoping to bag the next Fortescue dividend? You’d better hurry

ATM with Australian hundred dollar notes hanging out.

ATM with Australian hundred dollar notes hanging out.

If you want to get hold of the next Fortescue Metals Group Ltd (ASX: FMG) dividend, you will have to act fast.

That’s because the mining giant’s shares are scheduled to trade ex-dividend in the coming days.

The Fortescue dividend

Last week, Fortescue released its half-year results. The miner reported a 3.6% decline in revenue to US$7.84 billion. This reflects softer iron ore prices, which offset the company’s record-breaking shipments.

In respect to earnings, Fortescue’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 8.7% to US$4.35 billion and its net profit after tax dropped 4.7% to US$2.37 billion.

Combined with a lower payout ratio, this ultimately led to the Fortescue interim dividend being cut by 12.8%. It will pay an interim dividend of 75 Australian cents per share, down from 86 Australian cents per share a year earlier.

While this dividend cut is disappointing, based on the current Fortescue share price of $22.80, it still provides investors with a generous 3.3% yield.

How to receive it

If you want to give your income a boost with the Fortescue dividend, you will need to own its shares before they trade ex-dividend on 27 February.

Given that this is a Monday, investors would need to be a Fortescue shareholder at the close of play on Friday. After that date, it will be too late and if you buy shares the rights to the dividend payment will remain with the seller.

Fortescue then intends to pay its shareholders this dividend towards the end of next month on 29 March. Alternatively, investors can elect to use its dividend reinvestment plan (DRP).

The latter allows eligible shareholders to reinvest their dividends in ordinary shares. The price that these will be allocated at will be calculated as the average of the daily volume weighted average market price of Fortescue shares during the period of five trading days commencing on 2 March.

The post Hoping to bag the next Fortescue dividend? You’d better hurry appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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