Goldcorp Inc. (GG)announced that its Board has approved an 11% increase in its annual dividend. The increase will be reflected in the first monthly dividend payment of 5 cents per share for 2013.
Shareholdersof record at the close of business on January 17, 2013,will be entitled to receive payment of this dividend on January 25, 2013. Canadian resident individuals who receivedividends from Goldcorp after 2005 are eligible to an enhanced gross-up and dividend tax credit on such dividends.
The dividend increase underscores Goldcorp’s commitment in maximizing shareholder returns while investing in high return projects. The company last increased its annual dividend in 2011, when its Board authorized a 32% increase in the annual dividend to 54 cents per common share.
Goldcorp is one of the world's fastest growing senior gold producers. The company released its third-quarter 2012 results in October 2012. Its adjusted earnings (excluding one-time items other than stock-based compensation expenses) came in at 54 cents a share, comfortably exceeding the Zacks Consensus Estimate of 45 cents. However, the results were below 56 cents a share earned a year ago.
Revenues increased 17.6% year over year to $1.54 billion in the quarter, surpassing the Zacks Consensus Estimate of $1.37 billion. Operating improvements across the Red Lake and Penasquito mines contributed to the growth. Gold sales jumped 8.1% year over year to 617,800 ounces and production inched up 0.07% to 592,500 ounces.
Goldcorp reiterated its guidance for 2012 and expects to produce 2.35 million to 2.45 million ounces of gold. Total cash costs for the year are expected in the range of $310 to $340 per ounce of gold on a by-product basis.
We currently have a long-term Neutral recommendation on Goldcorp. The company, which competes with Barrick Gold Corporation (ABX) and Newmont Mining Corp. (NEM), carries a short-term Zacks #3 Rank (Hold).
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