Fortescue Metals Group (ASX:FMG) - Share price, News & Analysis

FMG fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	4/6
Financial Health	5/6
Dividends	5/6

FMG Stock Overview

Fortescue Metals Group Limited engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally.

Rewards

Trading at 31.1% below our estimate of its fair value

Earnings have grown 43% per year over the past 5 years

Risk Analysis

Earnings are forecast to decline by an average of 25% per year for the next 3 years

Unstable dividend track record

Fortescue Metals Group Competitors

BlueScope Steel

ASX:BSL

AU$8.3b

Champion Iron

ASX:CIA

AU$4.0b

Deterra Royalties

ASX:DRR

AU$2.4b

Grange Resources

ASX:GRR

AU$2.0b

Price History & Performance

Summary of all time highs, changes and price drops for Fortescue Metals Group
Historical stock prices
Current Share Price	AU$20.77
52 Week High	AU$26.58
52 Week Low	AU$13.90
Beta	0.75
1 Month Change	-2.12%
3 Month Change	11.97%
1 Year Change	-2.12%
3 Year Change	150.54%
5 Year Change	328.25%
Change since IPO	138,366.67%

Recent News & Updates

Apr 13

With EPS Growth And More, Fortescue Metals Group (ASX:FMG) Is Interesting

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Shareholder Returns

	FMG	AU Metals and Mining	AU Market
7D	5.0%	1.8%	-1.2%
1Y	-2.1%	7.7%	-0.009%

Return vs Industry: FMG underperformed the Australian Metals and Mining industry which returned 6.3% over the past year.

Return vs Market: FMG underperformed the Australian Market which returned 0.5% over the past year.

Price Volatility

Is FMG's price volatile compared to industry and market?
FMG volatility
FMG Average Weekly Movement	6.2%
Metals and Mining Industry Average Movement	10.9%
Market Average Movement	9.3%
10% most volatile stocks in AU Market	16.3%
10% least volatile stocks in AU Market	4.2%

Stable Share Price: FMG is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: FMG's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1983	10,232	Elizabeth Gaines	https://www.fmgl.com.au

Fortescue Metals Group Limited engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally. It also explores for copper and gold deposits. The company owns and operates the Chichester Hub that includes the Cloudbreak and Christmas Creek mines located in the Chichester ranges; and the Solomon Hub comprising the Firetail, Kings Valley, and Queens Valley mines located in the Hamersley ranges of Pilbara, Western Australia.

Fortescue Metals Group Fundamentals Summary

How do Fortescue Metals Group's earnings and revenue compare to its market cap?
FMG fundamental statistics
Market Cap	US$45.42b
Earnings (TTM)	US$8.99b
Revenue (TTM)	US$21.07b

5.1x

P/E Ratio

2.2x

P/S Ratio

Is FMG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FMG income statement (TTM)
Revenue	US$21.07b
Cost of Revenue	US$7.45b
Gross Profit	US$13.62b
Other Expenses	US$4.64b
Earnings	US$8.99b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 29, 2022

Earnings per share (EPS)	2.92
Gross Margin	64.65%
Net Profit Margin	42.65%
Debt/Equity Ratio	24.3%

How did FMG perform over the long term?

See historical performance and comparison

Dividends

13.8%

Current Dividend Yield

74%

Payout Ratio

New valuation analysis is now available for all ASX stocks. This is in beta.

Future Growth

How is Fortescue Metals Group forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-25.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FMG's earnings are forecast to decline over the next 3 years (-25% per year).

Earnings vs Market: FMG's earnings are forecast to decline over the next 3 years (-25% per year).

High Growth Earnings: FMG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: FMG's revenue is expected to decline over the next 3 years (-11.7% per year).

High Growth Revenue: FMG's revenue is forecast to decline over the next 3 years (-11.7% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FMG's Return on Equity is forecast to be low in 3 years time (17.8%).

Past Performance

How has Fortescue Metals Group performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

43.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FMG has high quality earnings.

Growing Profit Margin: FMG's current net profit margins (42.6%) are higher than last year (40.6%).

Past Earnings Growth Analysis

Earnings Trend: FMG's earnings have grown significantly by 43% per year over the past 5 years.

Accelerating Growth: FMG's earnings growth over the past year (41.2%) is below its 5-year average (43% per year).

Earnings vs Industry: FMG earnings growth over the past year (41.2%) underperformed the Metals and Mining industry 57.8%.

Return on Equity

High ROE: FMG's Return on Equity (57%) is considered outstanding.

Financial Health

How is Fortescue Metals Group's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: FMG's short term assets ($4.6B) exceed its short term liabilities ($2.1B).

Long Term Liabilities: FMG's short term assets ($4.6B) do not cover its long term liabilities ($7.3B).

Debt to Equity History and Analysis

Debt Level: FMG's net debt to equity ratio (6%) is considered satisfactory.

Reducing Debt: FMG's debt to equity ratio has reduced from 49.1% to 24.3% over the past 5 years.

Debt Coverage: FMG's debt is well covered by operating cash flow (268.9%).

Interest Coverage: FMG's interest payments on its debt are well covered by EBIT (107.1x coverage).

Balance Sheet

Dividend

What is Fortescue Metals Group current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

13.82%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: FMG's dividend (13.82%) is higher than the bottom 25% of dividend payers in the Australian market (2.53%).

High Dividend: FMG's dividend (13.82%) is in the top 25% of dividend payers in the Australian market (6.1%)

Stability and Growth of Payments

Stable Dividend: FMG's dividend payments have been volatile in the past 10 years.

Growing Dividend: FMG's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (74.4%), FMG's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: At its current cash payout ratio (86.9%), FMG's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.0yrs

Average management tenure

CEO

Elizabeth Gaines (57 yo)

4.25yrs

Tenure

US$3,569,990

Compensation

Ms. Elizabeth Anne Gaines, CA, MappFin (Macq) serves as Managing Director at Fortescue Metals Group Limited since August 2018. Ms. Gaines has been Chief Executive Officer at Fortescue Metals Group Limited...

CEO Compensation Analysis

Compensation vs Market: Elizabeth's total compensation ($USD3.57M) is about average for companies of similar size in the Australian market ($USD3.97M).

Compensation vs Earnings: Elizabeth's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: FMG's management team is considered experienced (4 years average tenure).

Board Members

Experienced Board: FMG's board of directors are considered experienced (6.4 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30