Here’s how much I would need to invest in Fortescue shares to generate a $150 monthly income

Earning monthly income from ASX dividend shares can be a good way of generating extra cash on the side.

Mining giant Fortescue Metals Group Ltd (ASX: FMG) has a strong history of paying dividends to investors.

Fortescue shares have climbed 5% in the year to date and were priced at $21.57 at last close.

How many Fortescue shares would get you to $150 a month in dividends?

Starting with the basics, a monthly income of $150 equates to an annual income of $1800.

Fortescue has paid $1.96 worth of dividends in the past year. This consists of an interim fully franked dividend of 75 cents per share in the first half of FY23, and a final fully franked dividend of $1.21 per share in the second half of FY22.

So in order to have received $1800 ($150 a month) from Fortescue shares over the past year, investors would need to own 918 shares in the company.

At the last closing price of $21.57 per share, this would cost an investor $19,801.26.

Dividend estimate

Looking to the future, the team at Bell Potter is tipping Fortescue to pay a larger dividend in the second half of FY23.

Analysts are forecasting Fortescue to pay a fully franked final dividend of 148.8 cents per share this financial year.

If this eventuates, Fortescue would pay a total of 223.8 cents per share in dividends in the 2023 financial year.

To receive $1800 in annual income — or $150 in monthly income — from a 223.8 cents per share dividend, investors would need to own 804 Fortescue shares ($1,800 divided by $2.238).

Therefore, based on the company’s last closing share price of $21.57, investors would need to invest $17,342.28 in Fortescue to generate a monthly income of $150.

Fortescue reported an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of US$4.352 billion in the first half of FY23, down 8.6% on the prior corresponding half.

Share price snapshot

The Fortescue share price has slipped 0.42% in the last year. However, in the past week, the company’s share price has climbed 1.94%.

Fortescue has a market capitalisation of about $66.4 billion based on its last closing price.

The post Here’s how much I would need to invest in Fortescue shares to generate a $150 monthly income appeared first on The Motley Fool Australia.

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More reading

• Which is the best ASX 200 iron ore stock now: BHP, Fortescue, or Mineral Resources?
• Why did the Fortescue share price smash the ASX 200 in March?
• 2 ASX 200 mining directors buying up their company shares in the past week
• Here are the top 10 ASX 200 shares today
• Bought $9,000 of Fortescue shares in 2018? Here’s how much passive income you’ve pocketed

Motley Fool contributor Monica O’Shea 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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