Skip to Content

Fortescue Metals Group Ltd FMG

Rating as of

Morningstar’s Analysis

Valuation
Currency in AUD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Lowering Our Fair Value Estimate for Fortescue Post the Massive Dividend

Mathew Hodge, CFA Regional Director

Analyst Note

| Mathew Hodge, CFA |

We lower our fair value estimate for no-moat rated Fortescue Metals to AUD 13 per share from AUD 15.10 per share previously. The shares have gone ex-entitlement to the final dividend, an unusually large AUD 2.11 per share or 14% of our previous fair value estimate. Ordinarily, we would not adjust the fair value estimate for dividends, given companies are generally creating new shareholder value daily and the size of the shareholder payout is usually small. But this is not the case for the Fortescue dividend. Our analysis otherwise is intact.

Read Full Analysis

Company Profile

Business Description

Fortescue Metals Group is an Australia-based iron ore miner. It has grown from obscurity at the start of 2008 to become the world's fourth-largest producer. Growth was fuelled by debt, now repaid. Expansion from 55 million tonnes in fiscal 2012 to about 180 million tonnes in 2020 means Fortescue supplies nearly 10% of global seaborne iron ore. However, with longer-term demand likely to decline, as China's economy matures, we expect Fortescue's future margins to be below historical averages.

Contact
87 Adelaide Terrace, Level 2, East Perth
Perth, WA, 6004, Australia
T +61 862188888
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees 3,898