Newmont Corporation NEM announced that its board declared an increase in its quarterly dividend.
The revised dividend of 25 cents per share is 79% higher than the previous quarterly dividend of 14 cents per share. The increased dividend will be paid out on Jun 18, 2020, to shareholders of record as of Jun 4, 2020.
Notably, the declaration and payment of future quarterly dividends remain at the board’s discretion. Further, it would rely on the financial results, cash flow and cash needs of the company, the duration and impact of the coronavirus pandemic, future prospects, and other factors considered important by the board.
Newmont’s shares have gained 83.1% in the past year against the industry’s decline of 20.3%.
The company’s focus on key growth projects, disciplined capital-allocation strategy and higher gold prices are some of the factors that are driving the stock.
Newmont’s Africa operations witnessed 1.1 million ounces of attributable gold production in 2019 at an all-in sustaining cost of less than $800 per ounce. This was mainly driven by the successful completion of Ahafo’s expansion projects. It is also expected to add annual gold production of 75,000-100,000 ounces per year from 2020 to 2024.
Last month, the company completed the sale of Red Lake complex to Evolution Mining Limited for $375 million. The transaction provided Newmont with exposure to future exploration opportunities.
Considering the divestment of its interests in Continental and KCGM, Newmont generated total cash proceeds of more than $1.4 billion. The company attained its divestiture target of $1-$1.5 billion in less than a year. The divestment of assets is likely to support Newmont’s capital allocation priorities.
Moreover, the coronavirus pandemic has led to a surge in gold prices. Further, declining oil prices and geopolitical tensions are triggering demand for gold.
The company’s average realized price of gold rose 20% year over year in fourth-quarter 2019 and boosted margins. Higher gold prices are expected to continue driving earnings in the near term amid market volatility and economic uncertainties.
Newmont Corporation Price and Consensus
Newmont Corporation price-consensus-chart | Newmont Corporation Quote
Zacks Rank & Other Stocks to Consider
Newmont currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Franco-Nevada Corporation FNV and Barrick Gold Corporation GOLD.
Kinross has a projected earnings growth rate of 41.2% for 2020. The company’s shares have surged 96.9% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Franco-Nevada has a projected earnings growth rate of 15.9% for 2020. It currently carries a Zacks Rank #2. The company’s shares have rallied 79.8% in a year.
Barrick Gold currently has a Zacks Rank #2 and a projected earnings growth rate of 51% for 2020. The company’s shares have gained 93.8% in a year.
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