FMG - Fortescue Ltd

[Value Collector]

I guess we will find out, but their policy is 50% - 80% pay out, I can’t see them having to lower the pay out to below 50%.

but, anything is possible, we will find out in 3 hours.

Some interesting dividend stats.

$1.08 ($1.54 inc franking), means if you bought your shares at

$28 - 11% dividend yield on an annual basis.
$25 - 12% dividend yield on an annual basis
$20 - 15% dividend yield on an annual basis
$ 7 - 44% dividend yield on an annual basis
$ 2 - 150% dividend yield on an annual basis

pretty good dividend yield no matter what price you bought in a over the last 10 years.

Now, of course we know FMG's dividend will fluctuate over time depending on the Iron ore price, but an interesting way to like about it is like a bank account that has a fluctuating interest rate, where you store your money and at the end of each 6 month period you get to find out what interest rate you earned based on your buy in price. Some years it surprises to the upside, some years will be lower, but on average it should be pretty solid.

 

[Value Collector]

These two slides from todays presentation show why I have said before that FMG’s moves into energy and decarbonisation are pretty low risk.

You can see on the map that a chunk of the investment in green energy is just going towards solar panels, wind turbines and batteries around their existing operations.This is a very low risk investment and offsets the high costs of Diesel and Gas fired electricity that they normally have to pay, and allows them to move more mining equipment to electricity.

The second slide shows that out of their total capital spend the energy and decarbonisation is a relatively small piece of the over all pie.

todays great dividend is only 65% of their earnings, the other 35% that is retained easily covers the capital spending. And the spend into the energy business may prove to be very profitable, I see it as a bit like committing money to exploration, mining companies can spend millions looking for new resources that turn out to be nothing, but sometimes they find stuff. If they went looking for copper we would see that as rational, looking for a new green energy business might prove just as lucrative.

 

[Bailxtrader]

As you may already know FMG must be doing pretty good business, Big Pay day. Twiggy and Nicola pocket over a 1Bn each. That some sort of profit soaring; Share holders be happy, nice knowing you FMG!

Fortescue Results: Iron ore price surge sends FMG profits soaring, Twiggy and Nicola to bank over $1bn in divvies - Stockhead

Iron ore miner Fortescue will shower shareholders in a $3.3b interim dividend, over $1b of that to Twiggy Forrest and his family.

stockhead.com.au

 

[farmerge]

FMG Got to keep following Twiggy because what is good for Twiggy is also good for the peasants. Down slightly on the year's opening SP. Can't hear any complaints about the dividend, of $1.08, Powerhouse company.

 

[Value Collector]

FMG Got to keep following Twiggy because what is good for Twiggy is also good for the peasants. Down slightly on the year's opening SP. Can't hear any complaints about the dividend, of $1.08, Powerhouse company.

Yeah, if you look at the chart that closely it's down slightly since Jan.

But, it's more that 5 x the $5.58 it was trading at 5 years ago, plus its paid $15.08 in dividends and franking , so we shouldn't really be hearing any complaints, from any one, except maybe those that missed the boat

Thats over a 50% compounded annual return, no one should have lost money on that, but some people did by being to fidgety, they should have just put their buy contract in the bottom draw and went to the movies instead of clicking refresh and trying to second guess the market.

 

[Ferret]

no one should have lost money on that, but some people did by being to fidgety, they should have just put their buy contract in the bottom draw

That's me.

Well I haven't lost money and I still hold FMG, but I have sold few that it would be nice to still hold.

I initially bought in around $7 and sold some around $20 so that the rest were free carried.

In hindsight the wrong move, but other times I've been burnt by not taking a profit.

 

[farmerge]

That's me.

Well I haven't lost money and I still hold FMG, but I have sold few that it would be nice to still hold.

I initially bought in around $7 and sold some around $20 so that the rest were free carried.

In hindsight the wrong move, but other times I've been burnt by not taking a profit.

@Ferret Sometimes there is Need and then there is Greed. Both need to be accounted for.

 

[basilio]

Great pick up VC on the expenditure of FMG.

From my observations I think the initial grand visions of mass Hydrogen production is looking a bit thin. I think from a profit POV it may well be very hard to extract a large ROI of Hydrogen based steel. That would be the hard nosed dollars and cents perspective.

As far as I can see Andrew Forrest recognises just how dangerous global warming is and the necessity of massive changes to rein in fossil fuel use.

Decarbonisation of FMG's operations is a fairly easy sell. Cost effectiveness and ROI is all there. Clearly BHP and RIO have done the same sums and came to the same conclusions and are busily following the path.

But the reality is that reversing global warming by massive changes to our entire economic system will only return a useful ROI only if we factor in societal collapse as a consequence of not taking action. It is very similar to a country in charge of a war economy against Nazi Germany. You do desperate things not because the ROI makes sense but the consequence of failure is to awful to imagine.

I think Andrew is one of the few businessmen who grasps the reality of what is happening. He has an ego which believes he can make a material change to the direction we are going. But he lives in a business world where the dollar rules. So until our business paradigm puts a value on a earth that can sustain our existence we are faced with the race to be the richest person on a dying planet.

 

[basilio]

That's me.

Well I haven't lost money and I still hold FMG, but I have sold few that it would be nice to still hold.

I initially bought in around $7 and sold some around $20 so that the rest were free carried.

In hindsight the wrong move, but other times I've been burnt by not taking a profit.

Me too..Have been steadily holding FMG for a few years and enjoying its excellent returns (Thank you VC)
Thought I'd be "smart " in Nov last year and sold down a large slab with the intention of buying back in when the price dropped becasue I though they had jumped too high ...

I have bought back in but of course have paid well for my "smartness". I agree with Ferret that I can think of other occasions I should have taken the dollars on the table and left.

 

[Value Collector]

Great pick up VC on the expenditure of FMG.

From my observations I think the initial grand visions of mass Hydrogen production is looking a bit thin. I think from a profit POV it may well be very hard to extract a large ROI of Hydrogen based steel. That would be the hard nosed dollars and cents perspective.

As far as I can see Andrew Forrest recognises just how dangerous global warming is and the necessity of massive changes to rein in fossil fuel use.

Decarbonisation of FMG's operations is a fairly easy sell. Cost effectiveness and ROI is all there. Clearly BHP and RIO have done the same sums and came to the same conclusions and are busily following the path.

But the reality is that reversing global warming by massive changes to our entire economic system will only return a useful ROI only if we factor in societal collapse as a consequence of not taking action. It is very similar to a country in charge of a war economy against Nazi Germany. You do desperate things not because the ROI makes sense but the consequence of failure is to awful to imagine.

I think Andrew is one of the few businessmen who grasps the reality of what is happening. He has an ego which believes he can make a material change to the direction we are going. But he lives in a business world where the dollar rules. So until our business paradigm puts a value on an earth that can sustain our existence we are faced with the race to be the richest person on a dying planet.

I think there is money in hydrogen provided it is done incrementally and in well thought out ways.

Also, the costs of fighting wars should be spread across the population of the country, and the people making the weapons can still make profits.

 

[basilio]

I think there is money in hydrogen provided it is done incrementally and in well thought out ways.

Also, the costs of fighting wars should be spread across the population of the country, and the people making the weapons can still make profits.

Clever and elegant. Realistically wars are not fought with balanced budgets. You go all out. Many things go wrong. Many things are tried that may not be the "best" way . You do your best.

I raised the issue of the overriding question of dealing with out of control GG emissions causing major disastrous change to or climate. Thirty/forty years ago we could have had major changes in policies and implemented a fast but steady program to decarbonise our society.
That boat has sunk.

Twenty years ago almost all people in the CC community recognised that only a massive "mobilisation" type approach would have a chance of making up the difference. Andrew Forrest would strongly agree with that view. That's why he took the heroic approach of wanting to have a mammoth hydrogen industry by 2030.

Of course a public company like FMG has to ultimately take a more commercially nuanced approach to it's investments.That makes it fairly straightforward to take the decarbonisation steps in relation to their mining operations. But the green hydrogen deal is not going to be easily profitable. Hence VC's observation.

The Climate Mobilization - The Climate Mobilization

Building a Movement for Climate Survival We are launching a movement to survive climate impacts, heal together, and rise up against fossil fuels. Our Pilot Programs in 2024 Neighborhood defense and other climate survival programs in Kentucky Daisy – founder of Rise and Shine (one of the 3...

www.theclimatemobilization.org

 

[Value Collector]

Clever and elegant. Realistically wars are not fought with balanced budgets. You go all out. Many things go wrong. Many things are tried that may not be the "best" way . You do your best.

I raised the issue of the overriding question of dealing with out of control GG emissions causing major disastrous change to or climate. Thirty/forty years ago we could have had major changes in policies and implemented a fast but steady program to decarbonise our society.
That boat has sunk.

Twenty years ago almost all people in the CC community recognised that only a massive "mobilisation" type approach would have a chance of making up the difference. Andrew Forrest would strongly agree with that view. That's why he took the heroic approach of wanting to have a mammoth hydrogen industry by 2030.

Of course a public company like FMG has to ultimately take a more commercially nuanced approach to it's investments.That makes it fairly straightforward to take the decarbonisation steps in relation to their mining operations. But the green hydrogen deal is not going to be easily profitable. Hence VC's observation.

The Climate Mobilization - The Climate Mobilization

Building a Movement for Climate Survival We are launching a movement to survive climate impacts, heal together, and rise up against fossil fuels. Our Pilot Programs in 2024 Neighborhood defense and other climate survival programs in Kentucky Daisy – founder of Rise and Shine (one of the 3...

www.theclimatemobilization.org

Well, wars come in all shapes and sizes, Companies like Boeing and Lockheed have made billions and billions since the world trade centres fell supplying and maintaining aircraft, drones and Jdams used in the wars in Iraq and Afghanistan.

I think that’s how any “War on climate change” would play out, the companies providing the “tools” needed to fight the war, will make decent profits for their contribution, and society as a whole will fund it, either buy purchasing the new mandated products, or through their taxes via subsidies.

and there is nothing wrong with society funding the war, because at the end of the day it’s for their benefit.

if you haven’t seen it yet, I highly recommend the movie “War Dogs”. It’s based true story, it’s funny but also gives some good insights into military supply contracts, I think it’s still on Netflix.

 

[sptrawler]

Interesting FMG are prepared to lighten up on the rhetoric, maybe a sign he exuberance is settling into a slow and steady mode.

Fortescue discusses buying into renewable energy supply​

Fortescue has spoken to BP-led Asian Renewable Energy Hub over a power deal for its Pilbara ore operations in what would be a departure from building its own renewable energy assets.

 

[basilio]

FMG taking a belting today.

Obviously going ex dividend so the SP should fall broadly inline with the dividend. Sometimes of course the market doesn't give quite such a hit.

SP currently down $1.45. Feels like a few stop losses have been hit.

 

[Value Collector]

FMG taking a belting today.

Obviously going ex dividend so the SP should fall broadly inline with the dividend. Sometimes of course the market doesn't give quite such a hit.

SP currently down $1.45. Feels like a few stop losses have been hit.

The dividend was $1.54 inc franking

so to Australian tax payers it’s worth $1.54 less today that it was yesterday, nothing to worry about.

 

[tech/a]

One of my longer-term Portfolio Systems has triggered a watch for FMG for pricing under $23.79
If hit the next stage will need to be triggered for me to hold it. This can be a long process but
balances my portfolio relative to the system. It's part of the system.

Thought I would place it up as a little interest, Not that many would-be
There are a few more so I'll do them in their Threads.

 

[Bailxtrader]

One of my longer-term Portfolio Systems has triggered a watch for FMG for pricing under $23.79
If hit the next stage will need to be triggered for me to hold it. This can be a long process but
balances my portfolio relative to the system. It's part of the system.

Thought I would place it up as a little interest, Not that many would-be
There are a few more so I'll do them in their Threads.

FMG sinking at under 25$ as I speak. Expect more of it. OMG Be happy to take 23$

 

[Value Collector]

FMG sinking at under 25$ as I speak. Expect more of it. OMG Be happy to take 23$

View attachment 172160

No, its $25.78 when you wrote that, not under $25. Its also up today (at least so far).

 

[eskys]

Wake up, Bailx, you're falling asleep on the job!!!

 

[Bailxtrader]

Wake up, Bailx, you're falling asleep on the job!!!

Tricky business! I notice it was up with my broker site. After all the revelations of FMG in the news and that big pay day I thought they be going great guns. But when I had a look at there chart I was surprised to see them sinking. So I guess I just lost the plot and to took FMG at face value and was shocked. I understood they'd been down these last couple of days and there up today 1.83% at this present time but I'm still shocked and need my Valium...Thing is I don't think it gunner climb any time soon. ( it chocking )

Is the recent downturn the past month due to Administration and poor money management giving away all those Billions ?