3 reasons why this could be a great time to buy Fortescue shares!

The ASX mining share Fortescue Ltd (ASX: FMG) has seen its fair share of volatility in the past 12 months, as the chart below shows. Due to multiple compelling reasons, this could be an exciting time to look at the mining giant.

Could the iron ore price rise?

Commodity prices are seeing significant change because of the Middle East events.

Iron ore isn’t produced in the Middle East – Australia and Brazil are two of the biggest producers of the commodity. But, the impacts of the Middle East could lead to a higher iron ore price the longer this goes on.

The iron ore miners are huge users of diesel, which has jumped in price and reduced in availability. Unless the conflict is resolved quickly, this could possibly result in diesel shortages.

If the diesel leads to reduced iron ore production globally for one reason or another, it could mean a higher iron ore price and therefore stronger profit generation for Fortescue, which would be a strong support for the Fortescue share price.

There are a lot of ifs there, but it’s something to keep in mind.

More appealing dividend yield

Fortescue has been one of the largest dividend payers over the last several years and I think that’s likely to continue, particularly if the iron ore price were to increase from here.

When the Fortescue share price falls, it can lead to a pleasing boost of the dividend yield. Considering the business has fallen by more than 11% since the 2026 peak, at the time of writing, this could be a good time to look at the business.

Excitingly, a 10% fall in the share price means the same sort of boost to the size of the dividend yield. For example, if the business had a 6% dividend yield and then the share price drops 10%, the dividend yield would become 6.6%.

According to CommSec, the Fortescue annual dividend per share for FY26 is projected to be $1.02. At the time of writing, that would mean a grossed-up dividend yield of more than 7%, including franking credits, which is a strong level of passive income even with interest rates moving higher.

Increasing copper exposure

I believe one of the most appealing aspects about the long-term for Fortescue shares is that the ASX mining share is looking to build up its exposure to copper.

Iron ore is exposed to uncertain Chinese demand, as well as an expected increase of supply from Africa which could be a headwind for the commodity price in the coming years. Therefore, the move to gain exposure to copper looks like a good strategic choice in the long-term because of global electrification and decarbonisation efforts.

The miner recently announced that it had progressed a binding agreement with Alta Copper Corp where Fortescue will buy the rest of the copper miner that it doesn’t already own through a Canadian plan of arrangement.

Fortescue will need to continue expanding its copper plans if it wants that commodity to play an important part of its earnings, but I think it’s a good start.

The post 3 reasons why this could be a great time to buy Fortescue shares! appeared first on The Motley Fool Australia.

More reading

• ASX 200 mining shares rebound after March sell-off creates opportunities
• Is this ASX iron ore stock a better buy than Fortescue?
• Which mining minnow is up more than 100% after a former Fortescue exec joined the board?
• How much could the Fortescue share price rise in the next year?
• Are Fortescue shares a top buy in March?

Motley Fool contributor Tristan Harrison 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.