Do you like gold but are tired of sitting on what seems like dead money? Here’s a few gold stocks with a ‘decent’ payout to its shareholders despite declining gold prices during the past four years. Unless the price of gold starts trending back up soon, though, there’s a risk that these dividends will get cut.
Sibanye Gold Ltd. (NASDAQ: SBGL) :
This South-African focused gold producer has the highest dividend in its industry, with a current yield of 6.7%. Much of this can be attributed to the 43% slide in its stock price since closing at a 52-week high of $11.35 on February 2, 2015. Labor troubles in South Africa have weighed on its share price for sure, yet the company has committed 25%-35% of its normalized earnings as dividends and doesn’t foresee a change in this policy. Sibanye continues to operate profitably given that it was able to produce gold at all-in sustaining costs of US$1,080 an ounce in 2014 while generating cash from operations of $659 million for the year.
Gold Resource Corporation. (NYSE MKT: GORO) :
Gold Resource is a profitable producer from its gold mine in Mexico. During Q1 2015, the company was able to mine gold at all-in sustaining costs of US$995 an ounce. Its stock has a current yield of over 4% but its share price is trading near its seven-year low. Investors even have the option of receiving physical gold or silver instead of cash. Gold Resource reported its fourth consecutive year of profitability in 2014 and been paying a dividend every month since July 2010. The company also has just 54 million common shares outstanding and hasn’t issued any new equity since August 2010.
Goldcorp Inc. (NYSE: GG) :
The big gold miner has operations throughout the Americas and is one of the lowest cost producers in the world, with all-in sustaining costs of only US$855 an ounce. The company expects its gold production to increase to between 3.3 million and 3.6 million ounces in 2015 and its stock has a current yield of about 3.6%. Its debt, though, has ballooned since 2009 and currently stands at approximately $3.7 billion. Capital expenditures of the past couple years have affected Goldcorp’s cash flow, as its free cash flow was negative $360 million during the last quarter. Thus, further declines in the price of the precious metal could force the company to cut its payout.
Honorable Mention:Franco-Nevada Corporation. (NYSE: FNV) :
The gold-focused royalty and streaming company’s 1.7% yield is nothing to write home about but its diversified portfolio of cash-flow producing assets makes it less risky than traditional miners. The company is debt free and has working capital of approximately $670 million. An institutional favorite, Franco-Nevada has increased its dividend every year since its 2007 IPO, including a 5% boost for the second quarter of 2015, and its stock price has surged at the compound annual growth rate of about 22% since going public, this during a time when gold prices were mostly in decline.
