Fortescue turns cash pump

Monday 21 August 2017

The remarkable turnaround is now complete:

That’s a huge payout ratio, turning the stock into a cash pump if the iron ore price holds up.

Of course it won’t, but with gearing so thoroughly reduced it can ride out the volatility by borrowing at the troughs to support the dividend.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.