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Newmont (NEM) Unveils Plan to Hike Annual Dividend by 79%

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Newmont Corporation (NEM - Free Report) has recently declared plans to hike its quarterly dividend to 25 cents per share or an expected annual dividend of $1 per share.

The latest hike, which will be effective upon the approval and declaration of its first-quarter dividend in April 2020, represents 79% increase from quarterly dividend of 14 cents per share declared in October 2019. The dividend hike is in line with the company’s disciplined approach to capital allocation strategy and supports its industry leading return profile.

Additionally, the company intends to continue its share repurchase program for up to $1 billion of common stock that was announced in December 2019. The company has used the repurchase program to retire 12.4 million shares worth $506 million for the quarter ended Dec 31, 2019. Overall, the company has returned around $1.4 billion to shareholders in 2019.

Newmont has one of the strongest and sustainable portfolios of projects, operations and exploration prospects in the gold space. The company is slated to enter its centenary year in May 2020.

Notably, the declaration and payment of future dividends are at the discretion of its board. It will also depend on future prospects, financial performance, cash requirements as well as other factors deemed relevant by the board of directors.

The company issued an updated 2020 guidance last week. For 2020, it expects attributable gold production to be 6.4 million ounces, which suggests a decline from earlier forecast of 6.7 million ounces.  

Gold costs applicable to sales projection for 2020 are unchanged at $750 per ounce. All-in sustaining costs per ounce expectation for gold for 2020 are unchanged at $975.

Zacks Rank & Key Picks

Newmont currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp (DQ - Free Report) , Pan American Silver Corp (PAAS - Free Report) and Commercial Metals Company (CMC - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has projected earnings growth rate of 255.2% for fiscal 2020. The company’s shares have skyrocketed 106.4% over a year.

Pan American Silver has an estimated earnings growth rate of 38.1% for 2020. Its shares have returned 57% in the past year.    

Commercial Metals has an expected earnings growth rate of 6.7% for fiscal 2020. The company’s shares have gained 40.2% in the past year.

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