So, you’e a cashflow investor. And you want to be a part of the commodities boom. The problem is that a lot of agriculture and resource stocks don’t pay dividends. Many of them can’t, I imagine, because they’re capital-heavy and need to reinvest all funds into their future projects because the products that make them profits take years to come to market. Also, there are a lot of start-up companies in this resource boom that are trying to take advantage of opportunities with China’s growing economy — companies like Spur Ventures. Such outfits won’t be paying a dividend, if at all, for a long time.
So you might be surprised, once you’re disgruntled enough with low distributions from your metals ETFs, that certain mining stocks do pay dividends – even if the yields can be quite small. Rather than making pennies from the ETF – and paying small management fees to do it – you might be better off just buying the gold and silver companies you like. And the dividends could be higher, too. I’ve done some of the legwork for you. Here’s my list of the
top eleven gold mining stocks that pay dividends:*
Gold Fields Limited (GFI:NYSE) – Price: 11.15 – Yield – 1.5%
Freeport McMoRan Copper & Gold Inc. (FCX: NYSE) – Price: 117.03 – Yield – 1.5%
Rio Tinto PLC (RTP: NYSE) – Price: 479.00 – Yield: 1.4%**
BHP Billiton Ltd (BHP: NYSE) – Price: 83.62 – Yield: 1.39%**
Newmont Mining Corp (NEM: NYSE) – Price: 48.95 – Yield: 0.82%
Yamana Gold Inc. (YRI: TSX) – Price: 14.89 – Yield: 0.80%
Barrick Gold Corporation (ABX: TSX) – Price: 40.96 – Yield: 0.70%
Goldcorp Inc. (G: TSX) – Price: 41.37 – Yield: 0.40%
AngloGold Ashanti Ltd. (AU: NYSE) – Price: 29.96 – Yield: 0.44%
Agnico-Eagle Mines Limited (AEM: TSX) – Price: 66.02 – Yield: 0.30%***
Kinross Gold Corporation (K: TSX) – Price: 19.87 – Yield: 0.20%
*All share prices are approximate, taken as of last Friday’s (June 20th, 2008) close. For simplicity’s sake, I’ve just quickly “ranked” these by their dividend yields. You’ll have your own criteria, of course.
**Runs its own DRIP but has high fees, though, for reinvests and OCPs.
***Agnico-Eagle Mines Ltd. also runs their own DRIP. No fees, but it is, however, less convenient than most DRIPs – they only allow optional cash purchases once a year and they only reinvest their dividends once a year (because they only pay dividends once a year, usually in March. If you don’t mind keeping up with the timing, though, and you can invest a good chunk at a time, the DRIP could still suit you just fine).
There are other large gold companies of course, like Harmony Gold, but they do not pay dividends. You should note that if you’re looking to buy gold and silver stocks directly, now might be a good time – many of them are down considerably from their 52-week highs (even Rio Tinto is currently only trading around 80% of its yearly high!).
What do you think? Are you invested in gold stocks? Think they’re not worth it? I’d love to hear from you in the comments section below. You also might be interested in reading my posts on silver stocks. If you liked this article, subscribe to my RSS feed for updates and more articles like it when I cover gold stocks in the future. Just go to the little orange square tab that you see in the floating sidetab, or beneath my site’s logo.
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your research is objective & insightful & useful to new investors
Analyst Report coming on VHGI Gold (OTCBB VHGI)