News: FMG Fortescue Appoints Noel Pearson As A Non-Executive Director, page-69

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135 Posts.

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03/08/24

10:26

Post #: 75054863
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Originally posted by madamswer: ↑

"Madam, I wasn't referring to payout ratios. That's irrelevant. I was talking about yields. Let me explain, it's very simple. If you invest on current figures, $10,000 into RIO within its current yield of 5.64%, you'll receive a dividend payment p.a, if my maths is correct, of $564 pa. If you invest $10,000 into Fortescue with its current yield of 10.2%you'll receive $1020 Take your pick."

Hoo boy, talk about tortured logic.

For starters, the reason FMG's DY is ostensibly higher than RIO's is because FMG's share price has cratered. So FMG's DY today being higher than RIO's is a strange thing to celebrate, given it has come at a cost of significant loss of the value of your capital invested in FMG.

Moreover, because you are looking at dividends in the rea-view mirror, your 10% figure for FMG is predicated on the dividend not being cut.

And like I said in an earlier post, if you believe that FMG will maintain its dividend in FY2025, then I've got a nice shiny bridge to sell you.

"Madam, tu be honest with you, I suspect we're wasting each other's time because our investment styles are so different, we may well be passing like ships in the night, and very much speaking different languages"

It isn't a matter of the difference between your investing style versus mine.
Instead, it's your investing style, that thinks that FMG is on a DY of 10%, being at stark odds with reality.

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But with your logic of the rearview mirror do you really think RIO is going to pay future Divs like the past, Copper and aluminium are roughly down 20% and the cost of processing it is much higher than iron ore?

FMG Price at posting: $18.75 Sentiment: Hold Disclosure: Held
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