UPDATE: Investors are urged to reconsider their positions in Fortescue Ltd (ASX: FMG) as the company faces declining iron ore prices, threatening lower dividends in the near future. With profits closely tied to fluctuating market conditions, many are exploring more stable alternatives within the Australian Securities Exchange (ASX).
Recent reports indicate that Fortescue’s dividends, which have been rewarding for shareholders, may decrease as the company’s reliance on iron ore profits becomes critical. The decision to abandon significant green hydrogen projects in Arizona and Gladstone further limits Fortescue’s diversification strategies.
For those seeking reliable income, two alternative ASX stocks stand out: Rio Tinto Ltd (ASX: RIO) and GQG Partners Inc (ASX: GQG).
Rio Tinto: A Diversified Mining Powerhouse
Rio Tinto, a global leader in mining, offers a diversified portfolio that extends beyond Australian iron ore. The company is well-positioned to capture growth in copper demand—critical for electric vehicles and renewable energy initiatives—while also producing commodities like lithium, aluminium, and diamonds.
Analysts are optimistic about Rio Tinto’s future, projecting a dividend of US$4.10 per share by FY26, translating into an impressive 7.5% grossed-up dividend yield, including franking credits. This diversification may provide a more stable and attractive option for investors compared to Fortescue.
GQG Partners: A High-Yield Investment Opportunity
Another compelling choice is GQG Partners, which not only pays dividends quarterly but also boasts a remarkably high dividend yield. As of 30 June 2025, GQG’s funds under management (FUM) reached US$172.4 billion, marking a 12.7% increase since December 2024.
With a history of outperforming benchmarks, GQG is expected to see continued growth in its FUM, which directly bolsters its profit and dividend potential. Analysts from Macquarie forecast an annual dividend of 16.7 cents per share in FY26, resulting in a forward yield of 11.8%.
IMPACT: As Fortescue investors brace for potential declines, these alternatives present an immediate opportunity to secure better dividend returns. The shift in focus to these diversified companies could provide a safeguard against the volatility of the mining sector.
What’s Next?
Investors should monitor the ongoing performance of Rio Tinto and GQG Partners as they assess their portfolios. With market dynamics shifting rapidly, those looking for sustainable dividend income may want to act quickly to capitalize on these opportunities.
This developing situation calls for immediate attention from investors who prioritize financial stability and growth in their investment strategies. Shareholders should evaluate their positions in Fortescue and consider reallocating to these promising alternatives.
“The copper division could eventually become the largest profit generator if it continues to grow its portfolio,” noted an industry analyst, emphasizing the potential of Rio Tinto amidst the shifting market landscape.
Stay tuned for further updates as this story unfolds and impacts the ASX investment landscape.
