Owning Fortescue Ltd (ASX: FMG) shares over the last few years has been very rewarding for dividends. However, with the recent lower iron ore price, investors may need to get used to lower passive income and a smaller dividend yield. Other ASX dividend stocks could be better choices than Fortescue.
As one of the largest iron ore miners in the world, the company's shorter-term success is very dependent on what happens with the iron ore price for profit generation.
With the company's decision not to go ahead with the Arizona or Gladstone green hydrogen projects, the business has fewer paths to diversify its earnings base in the coming years.
For investors who want to diversify their mining or ASX dividend stock exposure, the below two businesses could be appealing ideas.
Rio Tinto Ltd (ASX: RIO)
Rio Tinto is another of the world's largest miners, but its earnings are not entirely dependent on its Australian iron ore operations.
The business has a global portfolio of copper projects, a growing number of lithium assets, iron ore exposure in multiple regions including Australia and Africa, and it produces a number of other commodities including aluminium, bauxite and diamonds.
I think there's a good growth outlook for global copper demand thanks to electric vehicles, batteries, expansion of electricity grids, solar farms, wind farms and so on. The copper division could eventually become the largest profit generator if it continues to grow its portfolio.
The ASX dividend stock has provided investors with a pleasing dividend for a number of years and it seems as though that's going to continue.
According to the projection from the broker UBS, it could pay a dividend of US$4.10 per share, translating into a grossed-up dividend yield of 7.5% in FY26, including franking credits.
Thanks to the diversification of Rio Tinto's commodity portfolio, I think this business offers a more diversified and likely more reliable dividend than Fortescue.
GQG Partners Inc (ASX: GQG)
For investors hoping to find significant passive income, I think GQG is a very compelling option.
Not only does the company pay investors quarterly, which is pleasingly regular, but it also has a very high dividend yield.
Funds management businesses usually trade on a relatively low price/earnings (P/E) ratio, enabling them to have a relatively high dividend yield.
I think the business is undervalued for its growth prospects. Its funds under management (FUM) is the key metric that helps drive the company's profit and dividend. At 30 June 2025, the company's FUM reached US$172.4 billion, up 12.7% from 31 December 2024.
How has its FUM reached this level over the years? The company's investment funds have a track record of outperforming their benchmarks, which is a strong tailwind for growing FUM organically as well as attracting new FUM from clients.
Analysts from Macquarie are forecasting the business could pay an annual dividend per share of US 16.7 cents in FY26, which would translate into a forward dividend yield of 11.8%.
I think GQG could provide more dividend income than Fortescue shares over the next few years.
The post Overinvested in Fortescue shares? Here are two alternative ASX dividend stocks appeared first on The Motley Fool Australia.
Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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