The Prettiest Dividend in the World
Mar 13th 2012 5:59PM
Updated Mar 13th 2012 6:38PM
With two-year U.S. Treasury bonds offering a meaningless yield of 0.35%, it's no wonder that investors are clamoring for attractive dividends to help keep their income streams flowing.
Mortgage REIT Annaly Capital (NYS: NLY) seems a popular choice with investors, given its current 14.1% yield, but my own personal aversion to leverage forces me to steer clear. I enjoyed a nice ride -- albeit it a bumpy one -- with Penn West Energy that began amidst the carnage of the infamous Halloween massacre of 2006; but after locking in those gains last year, I set out to find the next target for my income allocation.
And then, like clockwork, the broadly increasing dividend yields from gold and silver miners that I had urged investors to watch for began to take shape in earnest. Even with its relatively elevated cost structure, major producer Gold Fields now yields more than 3%! By linking their payouts to the prevailing price of their primary products, Newmont Mining (NYS: NEM) and Hecla Mining (NYS: HL) offer added enticement for income investors sharing my expectation for continued long-term gains in the monetary metals. Meanwhile, for Fools who are cognizant of Eldorado Gold's (NYS: EGO) remarkable production growth profile, this mid-tier marvel will shine with a dividend policy that's tied to both production volume and the average gold price.
Although Eldorado's innovative dividend policy shines, the dividends that will soon be available from Gold Resource (ASE: GORO) will quite literally glitter. That's because Gold Resource this week became the first company to announce its participation in a new physical gold and silver bullion dividend program offered through Gold Bullion International. Itself a noteworthy leader in the industry's growing emphasis upon returning cash to shareholders, Gold Resource (often referred to by its ticker symbol, GORO) strikes me as a fitting pioneer for this new program. GORO has already doled out $41 million in cash to shareholders -- through 20 consecutive monthly dividends -- since the miner declared commercial production at its El Aquila mine in southern Mexico in July 2010. Employing the slogan "Earnings are opinion; cash is fact," GORO targets long-term dividend distribution at roughly one-third of cash flow.
So while you may think that Annaly Capital offers a stunning dividend with its current 14% yield, I think we can all agree that the forthcoming dividends from Gold Resource are simply the prettiest in the world. Have a look for yourself! The following images show either side of the gold and silver bullion coins that will be available through this new program.
If you know of a prettier dividend out there, I'm all ears.
- Add Gold Resource to My Watchlist
- Add Eldorado Gold to My Watchlist
- Add Hecla Mining to My Watchlist
- Add Newmont Mining to My Watchlist
- Add Annaly Capital Management to My Watchlist
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At the time this article was published Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He Tweets. He owns shares of Eldorado Gold and Hecla Mining.The Motley Fool owns shares of Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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