WHAT ARE WE LOOKING FOR?
Gold is reaching price highs not seen since 2013, because of dovish central banks and the geopolitical volatility caused by the U.S.-China trade war and, most recently, the U.S.-Iran crisis. Gold is up 21 per cent over the past 12 months. Expect gold miners to report better results in their next quarterly reports. Today, we will be looking more closely at gold miners that pay a dividend. The yield is our proxy for stable operations and we use the change in net operating profit after tax, or NOPAT, to find growing companies.
For the Globe and Mail this week, we look at dividend stocks in the volatile gold sector.
We screened the Canadian- and U.S.-listed gold miners by focusing on the following criteria: Market capitalization greater than $1-billion; Dividend yield; 12-month and 24-month change in the company’s NOPAT – appositive figure would indicate that there is growth and progress in operating efficiencies. For informational purposes, we have also included recent stock price, cost of capital (a weighted cost combining equity and debt, expressed as a percentage of total capital) and one-year return. Please note that some ratios maybe reported at the end of the previous quarter.
WHAT WE FOUND
Only 11 gold miners with a market capitalization of more than $1-billion pay a dividend.
Centamin PLC pays the highest dividend by far, but its negative NOPAT change over both 12 and 24 months suggests future dividend growth may not be sustainable. Newmont Goldcorp Corp., Royal Gold Inc., Yamana Gold Inc. and Kirkland Lake Gold Ltd. all show growing NOPAT over the past 12 and 24 months.
As the largest company on our list, suggesting more stable operations than smaller companies in this highly volatile sector, Newmont is well positioned to maintain and increase its dividend. Investors are advised to do further research before investing in any of the companies listed in the accompanying table.
|Ticker||Name||PRICE ($)||1Y PRICE RETURN (%)||MARKET CAP. ($BIL)||EXPECTED DIV. YIELD (%)||LAST QTR DIV. YIELD (%)||COST OF CAPITAL (%)||NOPAT CH. 24M (%)||NOPAT CH. 12M (%)|
|OR-T||Osisko Gold Royalties Ltd||12.27||0.5||1.77||1.60||1.62||5.93||0.02||-0.30|
|NGT-T||Newmont Goldcorp Corporation||55.15||28||45.22||1.31||1.48||5.65||1.46||2.07|
|ABX-T||Barrick Gold Corporation||23.29||40.59||41.40||1.08||1.17||5.75||-1.93||0.55|
|AEM-T||Agnico Eagle Mines Limited||77.44||44.66||18.51||1.15||0.91||5.95||-0.88||-0.19|
|RGLD-Q||Royal Gold, Inc.||113.79||33.33||7.46||0.77||0.86||6.20||0.68||1.69|
|YRI-T||Yamana Gold Inc.||4.86||45.4||4.62||1.03||0.79||10.85||0.62||2.26|
|AGI-T||Alamos Gold Inc.||7.5||41.98||2.93||0.70||0.69||9.97||-2.12||-0.86|
|SVM-T||Silvercorp Metals Inc.||7.18||135.59||1.24||0.44||0.65||14.75||-0.32||0.34|
|BVN-N||Compania De Minas Buenaventu||13.97||-14.42||3.54||0.60||0.55||6.57||-7.61||-8.19|
|KL-T||Kirkland Lake Gold Ltd.||58.33||60.15||12.26||0.42||0.31||8.12||4.31||2.86|