By JL Yastine
What a difference a year (and an extra $245 an ounce) makes…
At this time in 2015, with the price of gold nosing below $1,100, mining companies were in the last stages of the “Great Dividend Cut.”
Any free cash flow that a firm once had to pay a substantial dividend had long since dwindled to a trickle. Mining companies had shifted their focus to cutting costs, chopping debt and staying alive.
As I’ll explain, dividends are back on the front burner. Here’s why that’s good news not just for stock investors, but for the long-term price of gold as well.
A few mining companies are already raising their dividends. Agnico Eagle upped its quarterly payout from 8 cents per share to a dime, as did South Africa’s Sibanye Gold.
Others are telling shareholders that dividend increases are on the table soon. Australia’s Newcrest Mining recently paid its first dividend after cutting the payout to zero three years ago. Randgold Resources, in South Africa, said it may up its payout before the end of the year.