Woodside Energy vs Fortescue shares: Which mining stock is better for passive income?
If you’re looking to bank reliable passive income from the mining space, two big names on the ASX often get a close look: Woodside Energy Group Ltd (ASX: WDS) and Fortescue Ltd (ASX: FMG). Both are true Australian heavyweights, attractively sized, and generous dividend payersâplus, their fully franked dividends can be a real drawcard for savvy local investors. But if you’re weighing up Woodside Energy vs Fortescue shares, which is the better bet for building sustainable, hands-off income? Let’s break it down.
The case for Woodside Energy Group
Woodside Energy is Australia’s largest independent oil and gas company, and the largest operator of oil and gas production in the country. With roots going back to 1954, Woodside’s business stretches across offshore platforms and international assets, strengthened by its recent high-profile merger with BHP’s oil and gas portfolio. Listed since 1971, it now sits among the largest companies on the ASX.
What stands out about Woodside:
- It boasts a sizeable market cap of $63.25 billion, underscoring its scale and stability.
- The dividend yield is a strong 5.04%, fully franked, making its income stream friendly for local investors.
- Recent performance has been robust, with a 44.04% year to date returnâa real contrast against some sector peers.
The case for Fortescue
Fortescue is one of the giants in iron ore production, sitting just behind BHP, Rio Tinto, and Vale globally. Its flagship operations cover major mining hubs in the Pilbara, a major port, and the world’s fastest heavy-haul railway. Since debuting on the ASX in 1987, it’s grown into a $50.93 billion titan, underpinning a massive chunk of global iron ore supply.
Numbers I’d call out for Fortescue:
- The current dividend yield is a hefty 6.66%, fully franked, comfortably outpacing Woodside.
- A lower P/E ratio of 12.46 could be pointing to better value at these levels.
- However, 2026’s year to date return is -21.40%, showing headwinds for the share price.
Valuation comparison
Here’s a side-by-side look at the key income and value metrics:
| Woodside Energy (WDS) | Fortescue (FMG) | |
|---|---|---|
| Market Cap | $63.25b | $50.93b |
| P/E Ratio | 14.41 | 12.46 |
| Dividend Yield | 5.04% | 6.66% |
| Earnings per share | 1.605 | 0.931 |
| Dividend per share | 1.63 | 1.08 |
| Year To Date Return | 44.04% | -21.40% |
| Franking | 100% | 100% |
The key takeaway here: Fortescue offers the higher dividend yield for those hunting passive income, and sports a slightly cheaper earnings multiple. But Woodside is the larger company, with a higher earnings per share and a much better share price run lately.
Recent share price performance
All prices quoted are as of 16 September 2026. Woodside closed at $33.27, having climbed 2.84% that day, capping off a strong few weeksâwith only minor dips and overall upward price momentum. Year to date, Woodside shares are up a very impressive 44.04%.
Fortescue, meanwhile, finished at $16.54 (up 1.97% that day), but the bigger story is in the negatives: its year to date return is -21.40%. Across the most recent weeks, Fortescue has seen sharper drops and less sustained upward movement than Woodside, reflecting trickier recent trading conditions.
Which is the better buy?
If I’m focused on pure passive income, I think Fortescue has the edge on yield aloneâa 6.66% fully franked payout is nothing to sneeze at. That’s a good margin above Woodside’s 5.04%. But the picture isn’t that simple. Woodside brings a larger, arguably more resilient business, higher earnings per share, and absolutely stellar recent share price performance. Fortescue’s negative YTD performance, on the other hand, is a yellow flagâit’s been a rough run for FMG shareholders lately.
Both stocks have given out big, fully franked dividends for years, but Woodside’s price momentum suggests investors have more confidence in its near-term prospects. If my sole priority was maximising present yield, I’d take a good look at Fortescue. But factoring in total return and share price stability, my pick would be Woodside for a smoother and potentially more sustainable passive income ride. The lower headline yield is offset by the capital growth and big-company resilience, which count for a lot in this space.
The post Woodside Energy vs Fortescue: Which ASX mining share is best for passive income? appeared first on The Motley Fool Australia.
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Motley Fool contributor Laura Stewart 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 recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.
