Saturday, August 11, 2012

Gold Stocks are Down, Gold and Yields are Up, Time to Buy the Stocks?

Did you know that a couple years ago that there were only nine gold mining stocks with yields of 1% or more? Now there are twice that number with ten gold stocks with yields above 2%. Look at the price of gold versus gold stocks.

Freeport-McMoRan Copper & Gold Inc. (FCX) is a perfect example from the recently updated list of high yield gold mining stocks at Since the beginning of 2011, the stock has dropped about 40%. Because of the drop in the stock price and an increase in the dividend back in April from 25 cents per quarter to31.3 cents, the yield has gone for 1.4% to 3.6%. Yet during that same time frame, the price of gold has increased by approximately 15%. Stock down 40%, gold up 15%. Sounds like it might be worth taking a closer look.

Freeport trades at 11 times trailing earnings and 7.5 times forward earnings. It sports a golden yield of 3.6%, and pays its dividend quarterly. Earnings tanked by 48% for the latest quarter, with revenues dropping 23%.

Yamana Gold Inc. (AUY) is another gold stock that pays a decent dividend quarterly. The yield is 1.5%. The stock has a current price to earnings ratio of 20 and a forward PE of 11. The company was upgraded last month by HSBC Securities from Neutral to Overweight. Net earnings for the first quarter were $170.0 million or $0.23 per share on a basic and diluted basis which is an increase of 15% compared with net earnings of $148.2 million or basic and diluted earnings per share of $0.20 for the same quarter last year.

A couple of high yield gold stocks the pay semi-annually include Kinross Gold Corporation (KGC), sporting a yield of 2.1%, and Barrick Gold Corporation (ABX), yielding 2.4%.

For a free list of over twenty high yield gold mining stocks, which you can download and sort, go to

Disclosure: Author didn't own any of the above at the time the article was written.


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