Newmont Mining Corp. (NEM, Financial) announced a quarterly dividend of 7.5 cents per share on Oct. 24. The quarterly dividend is flat compared to the previous quarter and represents a 50% increase from the dividend distributed in the prior-year quarter.
The dividend will be paid on Dec. 28 to shareholders of record as of Dec. 8.
The board of directors determines the quarterly dividend according to the average gold price on the London Bullion Market during the previous quarter.
During the third quarter, the bullion averaged $1,277.84 per troy ounce on the London market. Therefore, the gold producer confirmed a quarterly dividend of 7.5 cents for the final quarter of fiscal 2017.
The company's dividend policy, which is linked to gold prices, is outlined in the chart below.
According to Newmont, the dividend declaration and payment is at the discretion of the board and is dependent on the miner's "financial results, cash requirements, future prospects and other factors."
If gold continues to average $2,555 per troy ounce also over the next three quarters, Newmont will likely confirm the quarterly dividend of 7.5 cents for the first three quarters of fiscal 2018 as well, leading to a forward annual dividend yield of 0.80% according to the current share price of $37.37.
Year to date, gold has gained nearly $90 per troy ounce on the London Bullion Market, or 7.5%, and is currently trading around $1,275 per troy ounce. Global economic and geopolitical conditions are usually positive for the commodity, so we can determine a positive outlook for gold for the rest of the year. Gold miners have a positve outlook as well. Newmont has gained 9.86% year to date, being one the gold stocks that has benefited from rising gold prices the most.
The company is expected to report its third-quarter results after the market closes on Oct. 26.Â
With an uptrending bullion that averaged $1,277.84 per troy ounce on the London Bullion Market during the third quarter, analysts expect Newmont will close the quarter with revenue of $1.86 billion. The EPS estimate for the quarter is 34 cents.
Newmont Mining is trading around $37.37 per share on the New York Stock Exchange with a market capitalization of $19.93 billion, a price-book (P/B) ratio of 1.82, a price-sales (P/S) ratio of 2.80 and an EV/Ebitda ratio of 15.14. The forward P/E ratio is 28.01.
The recommendation rating is 2.3 out of 5, and the average target price is $42.03 per share.
Disclosure: I have no positions in any securities mentioned in this article.
Also check out: (Free Trial)
