Owning Fortescue Ltd (ASX: FMG) shares typically means receiving a solid level of dividend income each year, so we’re going to look at what it could mean for investors in 2027.

Fortescue is one of the world’s largest iron ore miners and its dividend yield can be high because of the company’s low price/earnings ratio (P/E) ratio and a relatively high dividend payout ratio.

The ASX mining share recently gave an update that sent the Fortescue share price lower, so let’s remind ourselves of what was said.

Difficult start to FY27

In an ASX announcement, Fortescue said that in the three months to September 2026, total iron ore shipments were 46.8 million tonnes (mt), which was 6% lower year-over-year (despite including 2.5mt from Iron Bridge).

The realised/sold price for its hematite (iron ore) was US$80 per dry metric tonne (dmt), lower than US$90.70 it experienced during FY26.

Fortescue noted that iron ore shipments were affected by maintenance during the quarter. Iron ore sales of 42.9mt were below shipments because of the impact of ongoing negotiations with China Mineral Resources Group (CMRG), a key Chinese buyer of iron ore.

So, there’s potential for FY27 to be stronger or weaker, depending on what happens with the iron ore price and negotiations with CMRG.

FY27 payout prediction

Analysts currently project that Fortescue’s earnings per share (EPS) could fall to $1.34 in the 2027 financial year, according to Commsec, which could then see a drop in the dividend per share.

The projection on Commsec currently suggests that owners of Fortescue shares could receive an annual dividend per share of 85.8 cents.

At the time of writing, the forecast payout translates into a dividend yield of 5.6% excluding franking credits and 8% including franking credits.

For most businesses, that’d be a solid yield. However, it does represent a large decline of the dividend per share. It’s only due to the large decline of the Fortescue share price that the yield is still attractive.

What it would take for $1,000 of passive income in 2027

If the analyst predictions do become reality, then we can work out how many Fortescue shares they’d need to own to make $1,000 of passive dividend income from the current financial year.

Excluding franking credits, an investor would need to own 1,166 Fortescue shares to generate $1,000 of passive income.

Including franking credits, an Australian would only need to own 816 Fortescue shares for the desired dividends.

But, with the current uncertainty hanging over Fortescue, I could understand investors wanting to look at other ASX shares for returns.

The post How much must I invest in Fortescue shares to earn a $1,000 passive income in 2027? appeared first on The Motley Fool Australia.

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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.

It has been a tough period for PLS Group Ltd (ASX: PLS) shares.

A heavy decline on Tuesday in response to falling Chinese lithium prices means the mining giant’s shares are down almost 30% year to date.

While that is disappointing and weakening lithium prices are a concern, Bell Potter believes the selling has gone too far.

What is the broker saying?

Bell Potter notes that lithium prices have been weaker than it was expecting. As a result, it has trimmed its estimates for the medium term to reflect this. It said:

We have marked-to-market our lithium price estimates for the recent quarter and downgraded our near-term outlook, in line with recent price weakness. Spodumene Concentrate 6% Li2O CFR China (Fastmarkets) averaged US$2,107/t in the September 2026 quarter (BP est. US$2,500/t); spot prices are US$1,562/t. We now factor in SC6 prices of US$1,777/t in FY27 (-21% on prior estimate of US$2,250/t) and US$1,750/t in FY28 (-7% on prior estimate of US$1,875/t). 

Our estimates of US$1,625/t in FY29 and US$1,500/t long term are unchanged. Lower lithium prices have corresponded with weaker market sentiment in China and commodity agencies pointing to a modest market surplus in 2027. China’s SC imports reached a record in August 2026 (spglobal.com) with a surge in volume from Africa; lithium carbonate imports have also rebounded. However, articles suggest that China’s downstream inventories remain lean and that underlying demand fundamentals are strong.

The good news is that despite this weakness, the broker believes PLS will continue to deliver strong profit growth. It is forecasting a net profit of $698 million in FY 2027 (up from $526 million), then an increase to $784 million in FY 2028.

PLS shares upgraded

In response to the above, Bell Potter has upgraded PLS shares to a buy rating with a reduced price target of $4.40 (from $5.20).

Based on its current share price of $3.08, this implies potential upside of approximately 43% for investors over the next 12 months.

No dividends are forecast over the near term by the broker.

Commenting on the upgrade, Bell Potter said:

We upgrade to a Buy recommendation on recent share price weakness. At current lithium market prices, PLS will generate substantial earnings and cash flow with the restart of the 200ktpa Ngungaju processing plant. P2000 and Colina development studies are being progressed, providing organic growth optionality in markets with strong underlying EV and BESS-led long term demand fundamentals.

The post Down 30%: Why a top broker just upgraded PLS shares 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.

The ASX has produced some incredible long-term wealth creators.

Think about shares such as REA Group Ltd (ASX: REA), Pro Medicus Ltd (ASX: PME), and TechnologyOne Ltd (ASX: TNE). 

They have demonstrated how rewarding it can be when a company keeps growing earnings over many years, delivering average total returns of over 15% per annum over the past 15 years.

For example, a $10,000 investment growing at an average of 15% a year would have become approximately $80,000 over 15 years, without another dollar being invested.

Of course, returns like that are far from guaranteed. But it demonstrates why finding a business capable of growing for decades can be so rewarding.

The biggest challenge is recognising one before most of its growth has happened.

The good news is that I’ve identified three ASX shares that I believe deserve attention.

Life360 Inc (ASX: 360)

The first is Life360, which has built a family safety platform offering location sharing, driving reports, crash detection, and other services.

What I like about the ASX tech share is the size of the audience it has already built and how much more valuable that audience could become.

At the end of June, the company had 102.4 million monthly active users globally. Around 54 million were in the United States, with another 48.4 million elsewhere.

I see little reason why Life360’s international business couldn’t eventually become significantly larger than its US operations, particularly as awareness of the platform increases globally.

And because most people use the service for free, there is plenty of room to increase revenue through paid memberships, advertising, and additional services as the audience grows.

There is still a lot of work to do, particularly when it comes to generating more revenue from international users. But if Life360 can keep expanding its audience while converting more users into paying customers, I think it could be a significantly larger and more profitable business in another decade.

However, Life360 isn’t the only business that caught my attention.

The next company has recently secured billions of dollars in contracts, potentially transforming its growth outlook. The third has an entirely different opportunity that could allow it to keep growing for many years.

Megaport Ltd (ASX: MP1)

Another ASX share that I think has the potential to become a great compounder is Megaport.

It originally made its name helping businesses connect quickly and easily to cloud providers and data centres.

That is still an attractive market to operate in. As companies use more cloud services and move increasing amounts of data around the world, demand for flexible connectivity should continue growing.

But Megaport’s acquisition of Latitude.sh has been a game-changer and opened up a much larger opportunity.

The company can now provide computing capacity alongside its existing networking services, giving it exposure to the enormous investment taking place in artificial intelligence (AI) infrastructure.

And it hasn’t taken long for this strategy to start producing results. Since April, Megaport has announced approximately $2.3 billion in strategic AI infrastructure contracts.

Those agreements have already prompted management to upgrade its FY 2027 revenue guidance to between $720 million and $810 million.

That’s more than double the $312.2 million it recorded in FY 2026.

It is worth remembering that building and operating AI infrastructure requires substantial investment, with Megaport expecting capital expenditure of approximately $1.8 billion in FY 2027.

It also needs to deliver the projects successfully and generate attractive returns on that investment.

But if Megaport can demonstrate that its expanding infrastructure business is capable of generating strong and sustainable cash flows, the opportunity could be enormous.

Netwealth Group Ltd (ASX: NWL)

A final ASX share that I think deserves attention is Netwealth.

It operates in a market that most Australians are already familiar with. That is superannuation and investing.

The company provides the technology and administration services used by financial advisers to manage their clients’ wealth.

And I think it has an excellent opportunity to keep taking market share from older investment platforms.

One reason is that advisers increasingly want sophisticated systems that make it easier to manage portfolios, produce reports, and offer clients a wide range of investments.

Netwealth has invested heavily in its technology to meet those needs.

Once advisers move their clients onto the platform, those relationships can also be difficult to replace. Switching providers can involve significant work, particularly when large numbers of client accounts are involved.

This gives Netwealth an opportunity to keep growing alongside its existing customers while attracting new advisers.

The company’s recent performance shows how well the strategy has been working. At the end of June, Netwealth had $135.7 billion in funds under administration, representing growth of approximately 20% over the previous year.

Management is now targeting net inflows of between $18 billion and $20 billion in FY 2027 and has an ambition to double funds under administration over four years. 

If it can achieve anything close to that, I think earnings could grow very strongly.

There are risks, of course. Weaker financial markets could reduce the value of assets on the platform, while competition remains strong.

Netwealth is also defending a class action relating to First Guardian investment options. I wouldn’t dismiss that issue lightly, particularly when trust is so important in financial services.

Nevertheless, I believe Netwealth has a significant opportunity to keep growing as Australians build their retirement savings and advisers seek better technology.

The post [Gated article] I searched for the next great ASX compounder. These shares deserve attention appeared first on The Motley Fool Australia.

More reading

• A top fund manager is bullish on these ASX 200 shares
• Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares
• UBS’ top nine ASX large-cap stock picks
• Here are the top 10 ASX 200 shares today
• Could $10,000 invested in Megaport shares double by 2030?

Motley Fool contributor James Mickleboro has positions in Life360, Megaport, Pro Medicus, REA Group, and Technology One. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Megaport, and Netwealth Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Life360 and Netwealth Group. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.