Fortescue Metals Group Limited (ASX: FMG) shares are often a talking point in the media, with its major mining operations and green ambitions through Fortescue Future Industries (FFI). But, could the ASX mining share's move to cut jobs be a way to boost investor confidence in the business?

Job losses

According to reporting by the Australian Financial Review, the mining giant made some workers redundant last week. One of the newspaper's sources said that the job losses amount to less than one hundred.

The importance of each job shouldn't be discounted, and it's possible this could amount to a sizeable annualised reduction of costs, depending on the size of the pay.

The AFR reported on comments from a Fortescue spokeswoman who said:

This is business as usual for rapidly evolving global companies. We are always looking for opportunities for continuous business improvement to maintain our industry-leading cost position.

Right now we are growing globally and allocating resources swiftly to North America, responding to the Inflation Reduction Act.

Projects such as Iron Bridge are coming into production phase soon, while our work in Gabon is just kicking off. As this occurs project staffing naturally ebbs and flows.

The newspaper also reported that sources close to Fortescue noted that the company's "overall headcount" could rise in the year ahead despite the redundancies as it looks to make final investment decisions on "at least five" FFI green energy projects before the end of 2023.

What effect will this have on the Fortescue share price in the long term?

I'd assume that investors of every business would want their company to be having the right-sized workforce for the tasks and projects at hand. For a business of Fortescue's size, I would guess that there are always people coming and going.

However, it comes at a time when there are a wide number of tech companies that have been laying off workers. This is happening on the ASX as well. For example, last week it was announced that Xero Limited (ASX: XRO) would be cutting between 700 to 800 roles globally to streamline its operations and boost its operating profitability.

While Fortescue may save its bottom line some money with these cost cuts, in the short-term it could be the iron ore price that has the biggest impact on the Fortescue share price. The iron ore price has reached around US$130 per tonne according to Commsec. But, while Goldman Sachs suggests the iron ore price could reach US$150 per tonne in the next few months, it's certainly possible it could fall to US$110 as well.

In the long term, Fortescue's efforts to produce green hydrogen, green ammonia and advanced batteries could have the largest impact on whether the company can continue its success or not.

Fortescue share price snapshot

Over the last six months, Fortescue shares have risen over 22%.

The post Are Fortescue shares back on the menu amid job cuts? appeared first on The Motley Fool Australia.

The Fortescue Metals Group Limited (ASX: FMG) share price has performed strongly since the end of October, up 46%. Could it keep rising from here?

In the short term, there is no doubt that the company's fortunes will be dictated by the performance of the iron ore price.

China plays a key part in the demand for iron ore, so what happens there could have a big impact on the ASX iron ore share's performance in 2023.

Iron ore prices to strengthen?

The investment bank Goldman Sachs recently increased its prediction for the iron ore price for 2023 to US$120 per tonne, up from US$100 per tonne. The three-month expectation is US$150 per tonne.

It suggested that there could be a large deficit of 43 million tonnes for the iron seaborne market in the first half of 2023 with "lower seasonal supply from Australia and Brazil and an expected recovery of Chinese steel volumes."

Goldman Sachs also said there is an ongoing recovery for Chinese property sales and an increase in Chinese blast furnace utilisation, steel production and rebar prices.

Chinese steel mills reportedly have their lowest inventories since 2016.

Don't forget how strongly western economies bounced back after the end of COVID-19 lockdowns. I think something positive could happen for China as well.

Commsec numbers suggest that Fortescue could generate $2.28 of earnings per share (EPS) in FY23 while paying a fully franked dividend per share of $1.56. That translates into a grossed-up dividend yield of 10.4%.

While Fortescue can't control iron ore prices, I think its iron operations outlook looks positive with the ramping-up of the Iron Bridge project, the prospect of it being able to sell a (higher priced?) green iron product thanks to its decarbonisation efforts, and expansion into iron ore mining in Africa.

Green energy could drive value

For me, the thing that could drive a sustained increase in the Fortescue share price is the green energy side of the business.

This is a wide-reaching division that aims to do a number of things to help the world decarbonise, including the production of green hydrogen, green ammonia and high-performance batteries.

Fortescue has plans to produce 15 million tonnes of green hydrogen per annum by 2030, with European energy giant E.ON committing to buy a third of production by 2030.

The business is working on a global portfolio of potential green energy projects. It's pursuing possible locations in Canada, the US, New Zealand, Australia, Europe, Egypt, the Kingdom of Jordan, Brazil and so on.

It could be some time before Fortescue Future Industries (FFI) makes meaningful earnings. However, it seems the global decarbonisation shift by many countries is just gaining steam, which is a huge opportunity for the businesses involved in providing the technology and energy to do that.

I think the Fortescue share price and dividends can deliver good wealth-building returns from here if it executes well on the green energy plans. But, I would prefer to buy Fortescue shares under $18.

The post Could buying Fortescue shares at under $22 make me rich? appeared first on The Motley Fool Australia.

The share market can be both a help and a hindrance when it comes to building wealth. But it's only ever a hindrance when investors let it be. 

The market is a funny thing. We all love the liquidity that comes from having shares fluctuate in value on a daily basis. But having the quoted prices of our assets changing constantly can also be very unnerving. Particularly in a market crash or similar event.

Market crashes aren't common. But they do come around sooner or later. And they can have an extremely negative impact on investors' mindsets. Imagine if you had 80-90% of your net worth invested in the share market during the global financial crisis of 2007-2009. At one point, you would have seen the value of your portfolio decline by more than 50%.

So how can one hope to retire rich if the market falls like that? After all, it took several years for the ASX 200 to recover from the global financial crisis. That's a lot of years to live off a reduced asset base.

Well, the answer is dividends.

Most investors are familiar with dividend payments. In fact, many would probably think the passive income you can get from a dividend share is one of the best things about investing in the stock market.

But what most investors might not realise is how much dividends contribute to investors' overall returns here on the ASX.

Dividends are the key to retiring rich – especially in a stock market crash

To illustrate, let's examine one of ASX's oldest index funds. The SPDR S&P/ASX 200 Fund (ASX: STW) has been listed on the share market since 2001, As such, it has a very enlightening history we can look back on.

So according to this ETF's provider, this ASX 200 index fund has returned an average performance of 7.86% per annum since it first listed in 2001, assuming dividends are reinvested.

But of that 7.86%, only 3.19% per annum comes from capital growth. The remaining 4.67% per annum hails from dividend income. That's not even close to a 50-50 split.

During a market crash, it's capital returns that get hit hard. But many ASX dividend shares keep their income taps open. During the COVID crash of 2020, the ASX 200 fell by roughly 32.5% top to bottom:

But many ASX dividend shares kept paying dividends.

BHP Group Ltd (ASX: BHP) supported investors with a solid $1.75 in dividends per share. Fortescue Metals Group Limited (ASX: FMG) did the same, paying out one of the larger annual dividend payments in its history at $1.76 per share.

It was a similar story with Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL), Wesfarmers Ltd (ASX: WES) and Telstra Group Ltd (ASX: TLS).

During market downturns, the dividend payments from ASX shares can still keep you happily retired. You might not feel rich, with the value of shares fluctuating wildly. But the returns from dividends can certainly help you to stay afloat until the markets can recover.

The post How can I hope to retire rich when the share market is falling? appeared first on The Motley Fool Australia.

As you can see below, the mining giant's shares have risen almost 18% over the period.

Has the Fortescue share price peaked?

There are a couple of factors that will have a big say in whether the Fortescue share price rises further on comes crashing back down to earth. These are the price of iron ore and the Fortescue dividend.

The good news is that Goldman Sachs is feeling positive about the iron ore price. Last week, the broker commented:

The GS commodity team recently increased their iron ore price forecasts to US$120/t for 2023 (from US$100/t) with a 3m target of US$150/t (vs. spot at US$125/t) with the expectation that the seaborne market should swing into significant deficit of 43Mt in 1H23 on the back of lower seasonal supply from Australia and Brazil and an expected recovery in Chinese steel volumes.

If this proves accurate, it could potentially lend some support to the Fortescue share price in the near term.

Dividend outlook not so good

Another thing that could help prop up the Fortescue share price in the near term is its dividend. And while it is expected to be cut down meaningfully in FY 2023, it is still likely to provide investors with an above-average yield.

For example, Goldman Sachs is now forecasting a 22% cut to US$1.18 (A$1.79) per share, which equates to a fully franked 8.1% dividend yield.

However, whether income investors will be willing to hold onto its shares beyond the payment of this dividend is a matter for debate.

With Fortescue's spending on its decarbonisation ambitions expected to jump in FY 2024, its free cash flow will begin to dwindle and put huge pressure on its dividends.

It is for this reason that Goldman expects a further 47.5% cut to 60 US cents (91 Australian cents) per share dividend for that year. Based on the current Fortescue share price, this will mean a more modest 4.1% yield.

It's been a long time since Fortescue's shares have traded with that sort of yield, so it is conceivable that its shares will drop to a level that means its yield remains greater than 6%. For that to happen with this forecast dividend, the Fortescue share price would need to be trading at approximately $15.00. This is broadly in line with Goldman's sell rating and price target of $15.50.

Looking even further ahead, unfortunately, Goldman expects a further dividend cut to 40 US cents (61 Australian cents) per share in FY 2025. So, for its shares to offer a 6% dividend yield, they would need to drop to approximately $10.00.

All in all, this could mean the Fortescue share price remains elevated for the next six months, before starting a significant decline once its final dividend has been paid in September.

The post Will the Fortescue share price crash in 2023? appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

Fortescue Metals Group Ltd (ASX: FMG)

The Fortescue share price is down 2.5% to $22.22. Investors have been selling Fortescue and other mining shares today amid concerns that demand for iron ore from China may not be as strong as hoped. This follows the release of China's GDP target for 2023. It is targeting 5% growth with less of a focus on the infrastructure and property sectors.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price is down over 5% to $7.38. This rare earths producer's shares have come under pressure recently after Tesla announced plans to shift away from using rare earths in its cars in the near future.

Myer Holdings Ltd (ASX: MYR)

The Myer share price is down 4% to 86 cents. This is despite there being no news out of the department store operator today. However, it is worth noting that Myer is scheduled to release its half-year results later this week. And with its shares up over 100% since this time last year, some investors may be taking a bit of profit off the table.

New Hope Corporation Limited (ASX: NHC)

The New Hope share price is down 4.5% to $5.51. This appears to have been driven partly by the release of a broker note out of Ord Minnett this morning. According to the note, the broker has downgraded the coal miner's shares to hold rating with a $6.50 price target. It made the move on valuation grounds.

The post Why Fortescue, Lynas, Myer, and New Hope shares are dropping today appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) dividend share Fortescue Metals Group Limited (ASX: FMG) has been one of the biggest dividend payers on the ASX — and indeed the world.

Fortescue has been making significant profit over the last few years and paying big dividends. But the latest half-year dividend was the smallest interim dividend per share since 2019.

Last year, Fortescue was one of the top 10 biggest dividend payers in the world. Also on the list in 2021 were Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP).

But in 2022, the Janus Henderson Group (ASX: JHG) Global Dividend Index report noted that "lower commodity prices…meant mining payouts fell from their record 2021 high point".

The report also said, "2023 dividends are unlikely to repeat the sharp increases of 2022, as oil prices have moderated and mining payouts are likely to fall further."

Fortescue announced in the first half of FY23, net profit after tax (NPAT) dropped 15% to US$2.37 billion, while the ASX 200 dividend share's earnings per share (EPS) declined by 14% to 77 US cents. Fortescue's interim dividend declined 13% to 75 Australian cents.

Is the Fortescue dividend going to get worse?

The Fortescue profit is highly influenced by the iron ore price. Sometimes it can be hard to gauge which way the iron ore price is heading, or how long it will stay where it is.

In the middle of last year, there were forecasts the iron ore price was going to drift lower to 2024. While the future is unknown, the iron ore price remains in the US$120s per tonne, defying the negativity.

The current price enables Fortescue to generate a sizeable amount of profit while also helping its decarbonisation and Fortescue Future Industries (FFI) efforts.

Looking at the forecasts on Commsec, the dividend is predicted to decrease from here.

The full-year dividend for the 2023 financial year is expected to be $1.55 per share. This would translate to a grossed-up dividend yield of 9.7%.

In FY24, the annual dividend per share could then fall almost 25% to $1.17. This would represent a grossed-up dividend yield of 7.35%.

FY25 could then see another dividend cut of 26% to 86.6 cents per share. If that were to happen, it would be a grossed-up dividend yield of 5.4%.

However, profit and dividend estimates could change in the future if the iron ore price is stronger (or weaker) than currently forecast.

Fortescue share price snapshot

Since the beginning of 2023, the iron ore miner has risen by 11.6%.

The post This ASX 200 dividend share failed to be one of the world's biggest payers in 2022. Could it get worse? appeared first on The Motley Fool Australia.

The Fortescue Metals Group Limited (ASX: FMG) share price is up a slender 0.1% during the lunch hour on Friday.

At the time of writing, shares are changing hands for $23.08.

If the S&P/ASX 200 Index (ASX: XJO) iron ore miner can hold onto those gains, today will be the fourth straight day the Fortescue share price finishes in the green.

This follows a hefty loss on Monday to kick off the week.

What happened with the ASX 200 miner on Monday?

The Fortescue share price closed down 7.3% on Monday, finishing the day at $20.81.

Part of that loss stemmed from a slide in commodity prices over the weekend. This saw Rio Tinto Ltd (ASX: RIO) shares finish Monday down 2.9% while the BHP Group Ltd (ASX: BHP) share price fell 3%.

The Fortescue share price came under additional selling pressure on Monday as the stock traded ex-dividend on the day.

The miner reported its half-year results on 15 February, announcing a fully franked interim dividend of 75 cents per share, down 13% from the prior interim dividend.

On Monday, investors buying the stock were no longer entitled to that dividend, sending the share price lower. Investors who owned shares at Friday's close can expect that dividend payment on 29 March.

Fortescue share price buoyed by green steel ambitions

The Fortescue share price marched higher for the rest of the week, currently up 11% since Monday's close.

Part of that strength looks to be derived from the company's industry-leading sustainability push via its subsidiary Fortescue Future Industries (FFI).

The miner's 'green steel' initiative may have shielded it from some of the wider mining sector fallout on Tuesday following news that China's government had ordered a cutback in steel production at Tangshan.

Chinese officials said the move was necessary to reduce air pollution.

Indeed, on Wednesday Fortescue boss Andrew Forrest pointed to the huge opportunities available to the company in the United States. That's thanks to the US$437 billion worth of subsidies for new energy projects contained in the US Inflation Reduction Act (IRA).

Mark Hutchison, the head of FFI, jetted off to the US on Wednesday to discuss those opportunities with government and business leaders.

Fortescue share price snapshot

As you can see in the chart below, a big surge in the Fortescue share price since early November has helped send the ASX 200 miner's shares up 19% over the past 12 months.

The post What's moving the Fortescue share price this week? appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) posted a slight gain on Thursday, lifting 0.05% to close at 7,255.4 points.

It comes on the back of a strong session for the S&P/ASX 200 Materials Index (ASX: XMJ), which rose 2.9%.

It was helped along by shares in the market's biggest company BHP Group Ltd (ASX: BHP) which had their best day in months, gaining 4% to close at $48.05.

Higher gold and iron ore prices also likely helped the sector. Gold futures price added 0.5% overnight to reach US$1,845.40 an ounce while iron ore futures lifted 0.8% to US$126.80 a tonne.

The S&P/ASX 200 Energy Index (ASX: XEJ) also outperformed, increasing 1.4% after oil prices gained 1% overnight.  

On the other hand, the S&P/ASX 200 Financials Index (ASX: XFJ) fell 1.9%, with the big four banks coming in among its losers.

But which ASX 200 share came out on top of all others on Thursday? Let's take a look.

Top 10 ASX 200 shares countdown

Today's top-performing stock was none other than mining giant South32 Ltd (ASX: S32). It rose 5.15% to close at $4.70.

These shares made today's biggest gains:

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

Fortescue Metals Group Limited (ASX: FMG) shares are up 2.57% today to $21.95 apiece amid news that the miner's green subsidiary is looking to expand its investments in the United States.

According to reporting in The Australian, Fortescue's executive chair Andrew Forrest says the company has been encouraged to invest in the US instead of Australia.

This is because of incentives contained in the US Inflation Reduction Act (IRA) for green energy projects.

The IRA includes $US437 billion worth of subsidies for new energy projects.

Forrest made the comments at a conference in Sydney.

He said the head of Fortescue Future Industries (FFI), Mark Hutchison, has put forward three new "significant" proposals for green hydrogen investment in the US to the company's board.

Hutchison is flying to the US today for meetings.

Forrest said the US Inflation Reduction Act had "completely changed the landscape" for FFI.

He said:

We are going to have to work hard to keep Australia competitive (with the US). I can see us going backwards.

Forrest has been a leader among Australian companies on climate change and renewable energy.

He has travelled the world putting together partnership deals with many governments and businesses.

Together, they will develop renewable energy, green hydrogen, and green ammonia projects through FFI.

As we reported previously, FFI worked with the US government, the White House, and Senator Joe Manchin to support the IRA.

Hutchinson described the bill's passage as "game changing for the green hydrogen market globally and a brilliant outcome for FFI".

He said green hydrogen will become a multi-trillion-dollar market and "our role is to ensure FFI remains at the forefront of this global movement, to move at a rapid pace to capture this new market …".

He added that FFI is "acknowledged internationally already" as a leading developer of green hydrogen.

Fortescue shares are up by 7.65% in the year to date and up 24% over the past 12 months.

The post Has this 'completely changed the landscape' for the future of Fortescue shares? appeared first on The Motley Fool Australia.

The Fortescue Metals Group Limited (ASX: FMG) share price increased almost 3% today amid news out of China.

Fortescue shares closed at $21.40 apiece on Tuesday, up 2.84%. That was well above the S&P/ASX 200 Index's (ASX: XJO) gain of 0.47%.

As one of the world's biggest iron ore miners, sentiment about the company is susceptible to changes in the iron ore price. In turn, this can be impacted by changes in the relationship between supply and demand, or even the perceived future changes.

China is the key buyer of iron ore globally, so anything happening within the borders of the Asian superpower can have a large impact on the Fortescue share price.

What's happening in China?

According to reporting by the Australian Financial Review, China is focusing more stringently on environmental impacts and regulations once again.

The AFR reported that China's leading lithium production hub, known as Yichun, was ordered to "halt output" as investigators probed alleged environmental infringements at lithium mines, according to Bloomberg. This accounts for between 8% to 13% of global lithium supply.

The newspaper also reported that iron prices dropped after Chinese authorities ordered steel output to be reduced at the Tangshan production hub with forecasts of "heavy air pollution". Lower production of steel could mean that iron ore demand falls.

Is this going to happen more regularly?

Senior commodity strategist at ANZ Group Holdings Ltd (ASX: ANZ) Daniel Hynes was quoted by the AFR:

Traders in the lithium market are becoming increasingly concerned about a supply shock.

It does appear that Beijing is re-focusing on environmental issues again following a period of weak industrial activity due to COVID lockdowns. With China's reopening now ramping up, though, these crackdowns are likely to become more common.

The iron ore price dropped 3% overnight to US$122 per tonne.

Why is the Fortescue share price rising?

Sometimes the market movements of shares don't quite make sense.

Keep in mind that the 3% rise in the Fortescue share price today follows the 7% fall on Monday after the company went ex-dividend. Going ex-dividend means new investors are no longer entitled to the announced dividend.

The Fortescue dividend that's going to be paid to shareholders is 75 cents per share. That payment is due on 29 March 2023.

So, over the two days, the Fortescue share price has dropped 4.6%.

Also, it's worth keeping in mind that Fortescue is investing billions of dollars into decarbonising its business. That could mean that its 'green' iron is more likely to tick the box for Chinese authorities and may end up being worth more of a premium than if it wasn't 'green'.

The post Fortescue share price rebounds on possible China supply restrictions appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are sinking:

Appen Ltd (ASX: APX)

The Appen share price is down 13% to $2.39. This morning, the struggling artificial intelligence data services provider released its full-year results and reported a sizeable decline in sales. Things were even worse on the bottom line, with Appen swinging from a US$40.6 million profit in FY 2021 to a US$22.8 million underlying loss in FY 2022. Management also revealed that it has had a soft start to FY 2023.

Downer EDI Ltd (ASX: DOW)

The Downer EDI share price is down 23% to $3.06. Investors have been selling this integrated services company's shares after it released its half-year results. Downer reported a 2.9% increase in revenue to $6.1 billion but a 20.3% decline in profit to $68.1 million. Management blamed the latter on unprecedented weather, labour shortages, and contract and project losses in its utilities segment. Downer also downgraded its full-year guidance again.

Fortescue Metals Group Ltd (ASX: FMG)

The Fortescue share price is down 7% to $20.85. Some of this decline is due to the iron ore miner's shares trading ex-dividend this morning. Eligible shareholders can now look forward to receiving this dividend towards the end of next month.

InvoCare Limited (ASX: IVC)

The InvoCare share price is down over 10% to $9.91. Investors have been selling this funerals company's shares after its full-year result disappointed the market. Invocare posted a 12% increase in revenue but a loss of $1.8 million. The latter was impacted by an unrealised mark-to-market revaluation of pre-paid funds under management and contract liabilities.

The post Why Appen, Downer, Fortescue, and Invocare shares are crashing today appeared first on The Motley Fool Australia.

In morning trade, the iron ore miner's shares are down a sizeable 8% to $20.60.

This compares to a 0.8% decline by the benchmark S&P/ASX 200 Index (ASX: XJO).

Why is the Fortescue share price being sold off?

There are a couple of catalysts for the poor performance of the Fortescue share price on Monday.

The first is broad weakness in the resources sector, which has seen fellow miners BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) fall approximately 2% today. This appears to have been driven by a pullback in the price of commodities on Friday evening.

However, the main reason for the Fortescue share price decline has been the company's upcoming dividend payment.

Going ex-dividend

This morning, Fortescue has traded ex-dividend for its fully franked interim dividend of A$0.75 per share.

When a share trades ex-dividend, it means that the rights to an upcoming dividend payment are now with the owners or sellers of its shares and new buyers won't receive it. In light of this, a share price will tend to fall in line with the dividend to reflect this fact.

In addition, sometimes a share will fall even more than its dividend payment if some shareholders were planning to wait for the ex-dividend date before closing their positions.

This could explain why the Fortescue share price is falling significantly more than the value of its upcoming dividend payment today. After all, with the Fortescue dividend tipped to reduce materially in the coming years, some income investors may believe that now is the time to get out.

Whether you sold out or not today, those that are eligible can look forward to receiving this 75 cents per share dividend next month on 29 March.

The post Why is the Fortescue share price sinking 8% today? appeared first on The Motley Fool Australia.

ASX 200 mining shares are down on Friday with the S&P/ASX 200 Materials Index (ASX: XMJ) the only market sector in the red at the time of writing, down 1.25%.

Meantime, the benchmark S&P/ASX 200 Index (ASX: XJO) is up 0.23% as the end of trading draws near.

What's going on with ASX 200 mining shares today?

Let's take a look at the performance of the top six ASX 200 mining shares by market capitalisation.

The BHP Group Ltd (ASX: BHP) share price is down 1.73% to $45.88. The Big Australian released its 1H FY23 results this week, revealing a consensus earnings miss of 7.5% and a 40% cut to its dividend.

The Fortescue Metals Group Limited (ASX: FMG) share price is down 2.28% today to $22.31. The pure-play ASX iron ore share hit a new 52-week high of $23.33 on Tuesday.

The Rio Tinto Limited (ASX: RIO) share price is down 3.4% to $119.22. Rio Tinto reported its full-year results yesterday, which fell a touch short of expectations. The company slashed its dividend by 46%.

Newcrest Mining Ltd (ASX: NCM) shares are down 2.41% to $22.64 and South32 Ltd (ASX: S32) shares are down 2.22% to $4.41 today.

Mineral Resources Ltd (ASX: MIN) is today's outlier among the big ASX 200 mining shares.

The Mineral Resources share price plummeted this morning to an intraday low of $79.74, down 6.2% on yesterday's close. This was despite the company reporting incredible earnings growth in 1H FY23 and an interim dividend of $1.20 per share fully franked.

However, over the day, Minerals Resources shares have retraced and are up 0.04% to $85.06.

What's going on with commodity prices?

As we all know, the prices of ASX 200 mining shares are fundamentally influenced by commodity values.

Let's see what's happening with the commodities relevant to these six top miners at the moment.

The iron ore price fell by 1.13% to US$131.50 per tonne overnight. It's down 5% year over year (yoy) but up 5.6% over the past month.

This week, top broker Goldman Sachs tipped a 20% bump to the iron ore price to US$135 per tonne due to tighter supply and demand over the next three months.

The gold price is currently trading virtually steady, up 0.2% to US$1,826 per ounce. The gold price is down 6% over the past month and down 3% yoy.

Lithium held steady overnight but is down 15% over the past month and down 14% over the past year.

Copper futures fell to US$4.05 per pound overnight and are down 9% yoy. Half of this drop in value occurred over the past four weeks.

Nickel futures are down 2.2% to US$26,219 per tonne at the time of writing. They're down 6% over the month but up 5.5% yoy.

Newcastle coal futures traded up 0.2% to US$210 per tonne overnight. Coal has fallen from lofty heights and is down 42% over the past month and down 12% yoy.

The post Why are ASX 200 mining shares ending the week in the red? appeared first on The Motley Fool Australia.

Many ASX 200 shares like to pay out their dividends fairly soon after reporting their most recent numbers. But before a company can pay out a dividend, it must first choose an ex-dividend date, cutting off new investors from receiving the said dividend.

Loads of ASX 200 shares have already traded ex-dividend for their latest dividend payments. But there are quite a few that are scheduled for next week.

So let's discuss seven such shares that are about to cut investors off from their latest shareholder payments and trade ex-dividend for their next dividend.

7 ASX 200 shares going ex-dividend next week

Fortescue Metals Group Limited (ASX: FMG)

ASX 200 iron ore miner Fortescue is first up. Fortescue shares will go ex-dividend on Monday, 27 February, for the upcoming interim dividend. Investors will receive a reduced 75 cents per share, fully franked dividend payment on 29 March next month.

Santos Ltd (ASX :STO)

ASX 200 energy share Santos is next up. Santos will cut investors off from eligibility for its next interim dividend on Monday as well. Investors will then receive the 21.9 cents per share fully franked dividend on 29 March as well.

Telstra Group Ltd (ASX: TLS)

Telstra delighted its investors with a dividend hike earlier this month. Investors will be bagging an 8.5 cents per share dividend, fully franked of course, on 31 March. But Telstra is going ex-dividend for this payment on Wednesday 1 March.

Woolworths Group Ltd (ASX: WOW)

Next up is ASX 200 blue chip Woolworths. Woolies was another share that gave investors a dividend pay rise this earnings season. Shareholders can circle 13 April as payday for Woolworths' interim dividend of 46 cents per share, fully franked.

But investors will need to own the company's shares before the ex-dividend date of 2 March if they wish to receive it.

Coles Group Ltd (ASX: COL)

Not to be outdone by its arch-rival, Coles is also trading ex-div next week. Coles upped its own interim dividend as well this earnings season.

Coles owners will receive their payout a bit earlier than Woolies too, with 30 March as the date set for dividend payment of Coles' 36 cents per share, fully franked dividend. But the companies are sharing 2 March as their ex-dividend date.

AMP Ltd (ASX: AMP)

Much to the delight of investors, AMP is returning to paying dividends in 2023 after a four-year drought. 1 March is the ex-dividend date for AMP's next dividend payment.

Investors will then have to wait until 3 April to bag the 2.5 cents per share payment. This dividend will be only partially franked at 20%.

Treasury Wine Estates Ltd (ASX: TWE)

Finally, let's talk about Treasury Wine. Treasury will give investors its next payment on 4 April – a fully franked interim dividend of 18 cents per share. But new shareholders will be cut off from this dividend when the company goes ex-dividend on 3 March.

Foolish takeaway

These aren't the only major ASX 200 shares going ex-div next week though.

Watch out for Evolution Mining Ltd (ASX: EVN), Amcor plc (ASX: AMC), Domino's Pizza Enterprises Ltd (ASX: DMP), Ampol Limited (ASX: ALD), Platinum Asset Management Ltd (ASX: PTM), Pro Medicus Ltd (ASX: PME) and NIB Holdings Ltd (ASX: NHF) as well.

The post 7 ASX 200 shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

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.

Shares in S&P/ASX 200 Index (ASX: XJO) mining giant Fortescue Metals Group Ltd (ASX: FMG) have had a stellar run over the past five years, surging by more than 300%.

And during this time, the iron ore miner's executive chair, Andrew 'Twiggy' Forrest, has never been far from the headlines.

Love him or loath him, most Aussies with even a passing interest in investing would likely agree that Twiggy is one of the local bourse's highest-profile (and, arguably, divisive) leaders.

He established Fortescue just 20 years ago, building it up to become the $70 billion global behemoth it is today.

But what of Twiggy's green hydrogen dreams? Will these ambitious plans be the making or the undoing of the ASX's eighth-biggest company?

For their thoughts on whether Fortescue can continue delivering share price gains and decent dividends for its shareholders, we decided to ask two of our Foolish writers: one bull and one bear.

Here is what they said:

Bull thesis

By Tristan Harrison: The Fortescue share price has risen by 50% since 31 October 2022, with the iron ore price climbing to its current level of around US$129 per tonne (at the time of writing), according to Commsec.

In the short term, movements of the iron ore price will likely be the strongest influence on investor sentiment surrounding Fortescue. If the iron price drops, then Fortescue shares would likely fall too.

But, the Chinese economy isn't firing on all cylinders (yet), according to CNBC reporting. With lockdowns largely over and economic ties with the West improving, there could be another period of heightened demand for iron ore (and, therefore stronger profits for Fortescue), particularly if the Chinese government implements more growth policies focused on infrastructure and construction.

Goldman Sachs has also predicted that the iron ore price could rise by 20% to reach US$150 per tonne over the next few months, according to reporting by the Australian Financial Review. This could provide another potential boost for the Fortescue share price moving forward.

Another potential tailwind for Fortescue is that it's working on unlocking the huge Belinga iron ore project in Africa. This could help drive future earnings and add geographic diversification to the company's iron portfolio.  

But iron isn't my main reason for optimism about Fortescue shares.

I think that Fortscue Future Industries (FFI) is unlocking a very large avenue of growth for the company, which could already be worth many billions.

It's aiming to produce 15mt of green hydrogen by 2030 which, according to management, is "very achievable".

FFI already has customers lining up to buy some of that output, including European multinational utility operator E-ON, which could buy a third of the production by 2030. Once hydrogen production is up and running, I believe it will start generating meaningful earnings for Fortescue.

Decarbonising the planet could cost trillions of dollars according to various estimates. While this presents a cost for some, it creates a significant revenue opportunity for others. To this end, FFI is working on a global portfolio of green projects, on every populated continent.

Furthermore, heavy machinery, planes, and ships use vast amounts of fuel. This could be replaced by green hydrogen/green ammonia in the future, potentially unlocking a huge earnings stream for Fortescue over the coming decades.

FFI is also working on building a leading, global high-performance battery business with its WAE acquisition.

For these reasons, I believe Fortescue shares have a positive future, with the green side of the business potentially unlocking many billions of dollars in value. Whilst the shorter-term outlook could be volatile for the Fortescue share price, I'm staying focused on the long-term investment outlook.

Motley Fool contributor Tristan Harrison owns shares in Fortescue Metals Group Ltd.

Bear thesis

By James Mickleboro: Although Fortescue is undoubtedly a high-quality mining company, I believe its shares are vastly overvalued at current levels and could be about to begin a multi-year slide downwards.

The main reason for this is that the company's noble but costly decarbonisation plans look set to consume large amounts of its free cash flow and put significant pressure on its dividend payments.

If I were to say that Fortescue shares will soon provide investors with a 2% dividend yield, I wonder how many would be willing to hold onto them at current levels. My bet is very few. Particularly when you can earn a greater risk-free return from term deposits.

Well, the bad news is that a number of brokers believe that this could be the case in just two short years.

For example, Goldman Sachs is forecasting dividends per share of 38 US cents in FY 2024, 31 US cents in FY 2025, and then 32 US cents through to FY 2027. Based on the current Fortescue share price and exchange rates, this will mean yields of 2.5%, 2%, and then 2.05%, respectively.

Elsewhere, Morgans is a little more upbeat and expects yields of 3.6% in FY 2024 and then 2.2% in FY 2025. Though, it warns that Fortescue could even struggle to pay these dividends if iron ore prices are softer than expected. This could see management forced to lower its target payout ratio to support the high capital intensity of the FFI business.

But it's not just dividends that make me bearish on Fortescue's shares. It is also the company's valuation compared with more diversified peers.

While Fortescue may look like good buying based on its price-to-earnings (P/E) ratio of around 8 times, this multiple is not widely recommended for valuing mining shares as it tends to make them look cheap in comparison to shares in other sectors.

Instead, Goldman Sachs uses the price-to-net-asset-value (NAV) ratio for valuing mining shares. 

And despite the uncertain outlook for the miner, the broker notes that Fortescue trades at a sizeable 1.6 times NAV. As a comparison, BHP Group Ltd (ASX: BHP) trades at 1.1 times NAV and Rio Tinto Ltd (ASX: RIO) shares are changing hands at 0.9 times NAV.

Overall, I believe the risk/reward on offer with Fortescue shares is extremely unfavourable and, thus, I'd urge investors to stay clear of the ASX 200 miner.

Motley Fool contributor James Mickleboro does not own shares in Fortescue Metals Group Ltd.

The post Fortescue shares: Bull vs. Bear appeared first on The Motley Fool Australia.

The Fortescue Metals Group Limited (ASX: FMG) share price hit a new 52-week high of $23.33 in early afternoon trading.

There is no price-sensitive news out of Fortescue today, however, it's likely that Goldman Sachs' prediction of a 20% bump to the iron ore price is playing a role in the ASX mining giant's leap.

In addition, S&P/ASX 200 Materials (ASX: XMJ) is the best performer among the 11 market sectors today, up 0.6% compared to the benchmark S&P/ASX 200 Index (ASX: XJO) which is down 0.25%.

On top of all that, Fortescue shares might be looking more attractive than BHP Group Ltd (ASX: BHP) shares after the Big Australian released its 1H FY23 results, revealing a consensus earnings miss of 7.5%.

Not only that, but BHP also cut its dividend by 40%, which has likely disappointed income investors.

Fellow ASX mining share Mineral Resources Ltd (ASX: MIN) is also up today by 3.9% to $85.04.

The Rio Tinto Limited (ASX: RIO) share price is also in the green, up 1.1% to $126.50.

BHP shares are down 0.75% to $48.10 apiece.

Goldman Sachs tips iron ore price rise to US$150 per tonne

As my Foolish colleague Tristan reported this morning, Goldman has a three-month iron ore price target of US$150 per tonne and a six-month target of US$135 per tonne.

That means the iron ore price could rise by almost 20% over the next three months.

The iron ore price increased overnight by 0.39% to US$127.50 per tonne, according to Trading Economics.

It's down 2.67% year-over-year, and well off its all-time high of more than US$210 per tonne reached in June 2021. (No wonder the mining companies are paying reduced dividends in FY23 compared to FY22.)

Goldman says the iron ore price could rise because of an impending supply/demand imbalance.

This would be due to a seasonal boost in Chinese steel production during March and April and a "near-term" supply squeeze at the same time.

Changes in the iron ore price have a very direct effect on the Fortescue share price because the company is a pure play among the ASX iron ore shares.

Case in point: Both the iron ore price and the Fortescue share price have risen 3.66% over the past month.

The Fortescue share price is currently $23.26, up 2.97% at the time of writing.

The post Why has the Fortescue share price hit a new 52-week high today? appeared first on The Motley Fool Australia.

As miners, changes in commodity prices can have a significant impact on company financials. In simple terms, it generally costs the same amount of money to mine a tonne of iron, so extra revenue for that production largely adds straight onto net profit before tax.

Goldman predicts a strong iron ore price

According to reporting by the Australian Financial Review, Goldman Sachs is predicting the iron ore market could swing to a "significant" deficit in the second quarter of 2023.

A seasonal boost in Chinese steel production during March and April could happen at the same time as a "near-term" supply squeeze, which may mean that there's a 35 million tonne deficit in the second quarter.

Goldman has a three-month target of US$150 per tonne for the iron ore price, while the six-month target is US$135 per tonne. That means that the iron ore price could rise by 20% over the next three months, and almost 10% over the next six months. That sounds like good news for ASX 200 iron ore shares.

The AFR reported that Goldman points out that since the start of the fourth quarter last year, onshore iron ore inventories have fallen by 45 million tonnes to sit almost 30% below the prior corresponding period, the weakest since 2016.

But these prices are because of seasonal patterns rather than a strong recovery from China's property market. However, Chinese steel production is increasing, with blast furnace utilisation rates increasing in February compared to January.

The iron ore price is not expected to go above US$200 per tonne, unlike 2021.

Metals strategist Nicholas Snowdon commented that steel mills are suffering from iron shortages after destocking during the 2022 lockdowns:

This offers a significant right tail skew to the onshore iron ore stock cycle this year, likely providing a powerful amplifier to near-term price upside as supply chain confidence stimulates restocking appetite.

Iron ore possesses one of the most supportive fundamental setups into the second quarter across the industrial metals.

While we expect property-related new starts demand to decline less precipitously, we do not see reopening as a regime shift in ferrous as we expect for the rest of the base metals complex.

However, Goldman Sachs expects default rates to remain "high" in China, which could weaken the effectiveness of stimulus channels for property.

Is this a good time to buy ASX 200 mining shares?

The recent BHP result shows what a decline in resource prices can do – attributable profit fell 32% to US$6.5 billion, while the interim dividend was cut by 40% to 90 US cents per share.

It sounds like a promising time for iron ore miners, however the iron ore price may not stay that high for long according to the prediction. So, when the iron ore prices go back down, that could see the share prices fall, presenting a better opportunity.

The post Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares? appeared first on The Motley Fool Australia.

It's been an exciting earnings season so far for passive income investors, with many dividend-paying S&P/ASX 200 Index (ASX: XJO) shares bolstering their offerings. But not all has been well in dividend land this week.

Three ASX 200 shares have slashed their dividends, one by as much as 50%. Let's take a look.

3 ASX 200 shares slicing their dividends this week

First out of the gate is ASX 200 iron ore giant Fortescue Metals Group Limited (ASX: FMG). The company reported its first-half earnings on Wednesday.

It posted a 3.6% slump in revenue, falling to US$7.8 billion, and a 4.7% fall in net profit after tax (NPAT), which came in at US$2.4 billion.

The average iron ore price realised by the miner also tumbled last half to US$87 per dry metric tonne. For comparison, that figure was US$96 a tonne in the prior comparable period.

Finally, Fortescue declared a fully franked interim dividend worth 75 Australian cents – a 12.8% year-on-year drop.

Having a better half was Evolution Mining Ltd (ASX: EVN). Though, the ASX 200 gold share still slashed its dividend on Thursday.

It declared a 2 cents per share fully franked interim dividend – down from 3 cents per share this time last year. That marks a 50% reduction.

The company instead chose to put much of its extra cash towards growth projects at its Cowal and Red Lake assets.

It posted $101 million of statutory NPAT, an 11% improvement, and $446 million of earnings before interest, tax, depreciation, and amortisation (EBITDA), a 13% jump.

Finally, South32 Ltd (ASX: S32) also cut its interim dividend to 4.9 US cents, down from 8.7 US cents in financial year 2022 – a 43.7% drop.

The company posted its first-half earnings on Thursday, declaring a 34% drop in profits and a 44% fall in underlying earnings. They came in at US$685 million and US$560 million respectively.

Weighing on its finances were falling commodity prices, inflation, and uncontrollable costs.

The post Passive income watch: 3 ASX 200 shares that slashed their dividends this week appeared first on The Motley Fool Australia.

With such a muted response, it seems the result wasn't much of a surprise. We had already seen some of the numbers with the miner's quarterly update for the three months to 31 December 2022.

Earnings recap

Let's remind ourselves about the half-year highlights.

There was a slight reduction in revenue; it dropped 4% to US$7.8 billion. Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped 9% to US$4.35 billion, with an EBITDA margin of 56% (down from 59%).

Net profit after tax (NPAT) fell by 15% to US$2.37 billion, which led to the interim dividend being cut by 13%, though the dividend payout ratio was also reduced to 65% (down from 70%).

Fortescue's total debt was almost unchanged, but the net debt increased by $1.2 billion after a decrease in the cash balance.

The ASX 200 miner also noted a number of areas of progress for Fortescue Future Industries (FFI), including advancing the Holmaneset project in Norway, which could unlock a 300MW green hydrogen and green ammonia facility and support infrastructure.

What to make of this result?

Yesterday, The Australian reported on comments by Moody's Investors Service analyst David Xu, who said:

Although lower than the prior year, earnings were still solid, underpinned by good operational performance and elevated realized iron ore prices.

Similar to industry peers, Fortescue's operating costs have risen on inflationary pressures. However, Fortescue's cost position remains low for the sector, providing a good buffer against further downside risk to iron ore prices.

Although net debt increased, Fortescue's balance sheet remains solid with good liquidity and low financial leverage, providing the company with capacity to fund its upcoming capital expenditure.

While not exactly a ringing endorsement, it seems like the result was solid enough for the Fortescue share price to hang onto its gains from the last few months.

Is the Fortescue share price a buy?

The business has benefited from the higher iron ore price thanks to optimism about China's reopening after COVID-19 lockdowns.

Time will tell whether the iron ore price can help drive Fortescue shares higher, or lower.

But, with the things that the business can control, it's doing well. In the FY23 first half, the amount of iron ore shipped increased by 4% to 96.9 mt.

I'm particularly excited by the company's potential with its green energy and green products.

The company noted that Fortescue Future Industries (FFI) achieved a "significant breakthrough" in the pursuit of green iron ore by successfully processing 150kg of iron ore to make metallic iron that could pave the way for the production of green iron at scale.

It has also entered an agreement with Baker Hughes to jointly explore opportunities for the scale-up and adoption of technology solutions for green hydrogen, green ammonia, and geothermal products. The company has also made an investment in Fabrum, a company that's developing "world-leading" applications for hard-to-abate sectors like mining, heavy transport, and aviation.

While I wouldn't say that Fortescue is fantastic value, nor do I think the Fortescue share price would be the best choice today, I still think the future is positive for the company.

The post Should I buy Fortescue shares following the ASX 200 miner's latest results? appeared first on The Motley Fool Australia.