Fortescues September Performance

In September, the Fortescue Metals Group Ltd (FMG) share price exhibited resilience, outperforming the S&P/ASX 200 Index (ASX: XJO), which faced a decline of 3.5%. FMG's shares, in contrast, experienced a modest 2.4% dip during the same period.

Dividend Impact

One key factor influencing FMG's share price is its reputation for offering substantial dividends to shareholders. This reputation is attributable in part to its generous dividend payout ratio and low price/earnings (P/E) ratio.

For the FY23 final dividend, FMG declared a distribution of AU$1 per share to its shareholders. The ex-dividend date, marking the cutoff for new investors to receive the upcoming dividend, occurred on

September 4, 2023, with the dividend payout following on September 28, 2023. Interestingly, despite the ex-dividend date, FMG's share price only declined by approximately 50 cents, whereas the ASX 200 saw a 3.5% decline. This suggests that without the dividend, FMG shares might have seen an increase.

Iron Ore Price Influence

As a major player in the global iron ore mining industry, changes in the iron ore price significantly impact FMG's short-term profitability outlook and its share price.

While monthly business costs tend to remain relatively stable, fluctuations in commodity prices can substantially affect monthly profits. A drop in revenue, on the other hand, can negatively impact net profits.

According to Trading Economics, the iron ore price began September at approximately US$117.50 per tonne and ended at around US$119.50 per tonne. This slight increase in price has bolstered FMG's profitability and defied expectations of a sharp decline below US$95 per tonne.

A sustained iron ore price above US$110 per tonne enables FMG to generate more profits for investment in green energy initiatives and continued dividend payouts. Additionally, the demand for iron in sectors like electric vehicles may provide ongoing support despite challenges in the real estate construction

sector in China.

Performance Overview

Since the beginning of 2023, FMG shares have demonstrated resilience, rising by 1.6%, while the ASX 200 experienced a marginal decline of 0.04%.

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