This gold miner is expected to grow at an annual rate of 43.05% over the next five years. Three analysts just raised their EPS estimates for the company.
Newmont Corporation (NEM)
From The Dividend Hunter
In February and March of 2020, the full gamut of high-yield investment classes crashed much harder than the rest of the stock market. After dozens of high-profile dividend cuts and suspensions, income stocks did not recover with the broader market before the fourth quarter.
Large-cap gold mining company Newmont Corporation offers the potential for significantly higher dividends as the prices of gold and silver move higher. Newmont started a dividend policy paying a significant portion of added free cash flow as dividends.
The base dividend rate is $0.25 per quarter/$1.00 per year. That rate has a base gold reference at $1,200 per ounce. Targeting 40% – 60% of incremental free cash flow with gold above $1,200 to be paid as dividends. Evaluating dividend increases with gold price increments of approximately $300 per ounce.
In September 2020, following this policy, based on a $1,500 reference price, the NEM dividend was boosted by 60% to $0.40 per share. For a mining company, almost 100% of increased gold prices drop to the bottom line. If gold moves to $3,000, the NEM share price and dividends should provide total returns that are multiples of the gain in gold.
Plaehn, The Dividend Hunter, yn345.isrefer.com/go/cabmdpc/cab/, December 16, 2020