Dividend Paying Gold Mining Stocks
Gold has been dominating the headlines for several years as Wall Street pundits have been extolling the virtues of the rising price the shiny metal has experienced since a little over a decade ago. Love it or hate it, gold investing is definitely here to stay and with quantitative easing increasing our money supply indefinitely, it seems that higher interest rates and inflation is in our future. With that being said, there are a lot of gold mining stocks you might want to consider for your dividend investment portfolio. Many are well established companies that have been around for decades and some have bee paying dividends for as long too.
First up is a company that, while currently has negative earnings, has been a long time dividend payer going back almost 30 years. Newmont Mining Corporation (NEM), a gold, copper, and silver mine operator, currently yields a very low 0.40% with an EPS of -5.37. Despite those gloomy numbers I wanted to share NEM because of its eye popping ten year annualized dividend growth rate of 21.83%. Of course, investing in gold mining companies has all the risks if investing in any public company with the added stress of fluctuating gold and silver commodity prices. NEM may be one to consider since it has a very high annualized dividend growth rate and if gold and silver prices climb back again, will give NEM greater cash flow and profitability.
Next is Goldcorp Inc. (GG) a precious metal operator with locations in Canada, the United States, Mexico, and Central and South America. GG currently yields a respectable 2.20% with an EPS of -3.60. Again, like most players in the gold mining sector profitability depends heavily on the current price of the commodity being mined. While currently offering a decent yield GG has an impressive ten year annualized dividend growth rate of 14.49%. Like NEM, GG has been growing their dividends nicely the past decade as gold prices have climbed as well.
Another large gold miner is Barrick Gold Corporation (ABX) which has been paying a dividend for almost 30 years, currently yields 1.10% with an EPS of -10.47. ABX mainly produces gold and copper and owns many properties all over the world including properties located in the United States, Zambia, Chile, Dominican Republic, Argentina, Tanzania, Canada, Saudi Arabia, Australia, Papua New Guinea, and Peru. ABX has an impressive ten year annualized dividend growth rate of 8.56% but, again, like the other stocks mentioned is currently not profitable. Noticing a trend here?
Finally I’d like to mention two smaller cap gold mining stocks that also have negative earnings as the mining industry as a whole is currently experiencing.
Yamana Gold, Inc. (AUY), a gold mining and exploration, extraction and processing company with precious metal properties and land positions throughout the Americas, including in Brazil, Chile, Argentina, and Mexico currently yields 1.70% with an EPS of -0.77. While having a shorter dividend history than many of the other stocks mentioned it is worth noting that the five year annualized dividend growth rate for AUY has been a very high 21.06%. Time will tell to see if AUY can follow the impressive annualized dividend growth rates of the other larger cap companies in this article.
Last, is Agnico Eagle Mines Limited (AEM) with mineral properties in Canada, Finland, and Mexico. AEM, Besides for its core of mining gold and silver also mines copper, zinc, and lead which diversifies its assets. AEM currently yields a very low 0.90% with an EPS of -1.86. The silver lining for all the negative earnings has been the amazing annualized dividend growth rates of each company mentioned and AEM is no exception having a ten year average dividend growth rate of 40.2%. That is some serious dividend growth that every dividend investor would like to get their hands on.
It seems that the smaller cap gold mining stocks are faring a little better than the large cap stocks mentioned earlier during this climate of relatively depressed gold and silver prices from the highs of a few years ago.
Investing in gold mining stocks has never been a trade without inherent risks. As mentioned, not only do operations of the mine matter, the price of the commodity being mined is as important in determining the profitability of the company as a whole. While the current yield of all the stocks mentioned are relatively low and all the companies have negative earnings, the one bright spot in this sector, with regard to dividends, has been the amazing annualized dividend growth rate each company has experienced. As in previous articles written, the question that ultimately comes up is whether you can accept a low current yield but amazingly high dividend growth rate.
Are any gold mining dividend paying stocks in your portfolio?