Agnico Eagle Mines Ltd.'s (AEM, Financial) board of directors declared a cash dividend for the second quarter of 2017 last month.
The Canadian gold producer will pay 10 cents per ordinary share on June 15 to shareholders of record as of May 30.
Agnico Eagle has distributed dividends to shareholders every year for 35 years, one of the few gold mining companies to do so continuously.
The dividend is backed by solid improvements in the company’s economics, which are presented in its first-quarter 2017 results.
Agnico Eagle is trading around $49.21, up 96 cents or 1.96% from the previous trading day. The stock is trading with a price-earnings (P/E) ratio of 54.88 and a price-sales (P/S) ratio of 5.08. The forward P/E ratio is 54.88. With EPS forecasted to be 71 cents for full-year 2017, this gold stock currently looks overvalued even though it is trading considerably lower than its 52-week high of $60.10 per share.
In my opinion, the company currenly represents the best investment opportunity in the industry. Agnico Eagle Mines can rely on an asset base composed of high-quality gold deposits, which have one of the highest mineral reserve grades in the industry.Ă‚
Furthermore, the company's assets bring a low political risk to its operations since they are located in mining-friendly jurisdictions. Approximately 67% of the company’s total production is in North America, 21% is in Finland and the remainder is in Mexico. This is important because it will not be terribly impacted by the U.S. dollar depreciating against local currencies.
In addition, the company mines mostly from open-pit gold deposits, considerably reducing Agnico Eagle's operating costs and expenses.
This asset base allows Agnico Eagle Mines to benefit from rising gold prices. Institutional investors’ renewed interest in gold followed an expected increase in U.S. interest rates by the Federal Reserve. Negative policy rates’ propagation in countries with other key reserve currencies paint a favorable outlook for future gold prices.
Disclosure: I have no positions in Agnico Eagle Mines Ltd.
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