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Top 5 ASX Gold Stocks That Pay Dividends
Interested in ASX gold stocks that pay dividends? We’ve rounded up a list of the top Australian companies currently paying dividends.
If you're interested in investing in gold stocks, it's worth taking a look at the top ASX gold stocks that pay dividends.
A dividend is a sum of money that is paid regularly by a company to a class of its shareholders out of its earnings. Dividends are often issued as cash payments, but can also be issued as stock or other property.
Read on for a deeper look at gold dividend stocks and a breakdown of the top five dividend-paying ASX gold stocks.
What is a gold dividend stock?
A dividend is essentially a reward that is paid to shareholders for their investment in a company’s equity. Dividends generally comes from a company’s net profits — while the majority of a company’s net profits stay within the company as retained earnings, an outstanding portion can be divided up and distributed to shareholders.
Dividends are generally a sign that a company is flourishing, but there are times when a firm may still make dividend payments even when it's not achieving suitable profits. This tends to happen when a company wants to maintain confidence by keeping up with its established track record of regular dividend payments.
In the past, investors didn’t always look to gold stocks as a way to obtain a dividend. However, a rising number of gold miners now pay — and often raise — dividends. If investors select the right ones, they can set themselves up to profit handsomely from both a steady stream of dividend income and the strong capital gains available in resource investing.
A dividend is especially attractive in the sometimes volatile gold sector because it gives investors a degree of security — put simply, if a company pays a dividend, it generally feels that it has the cash to do so, and will have the ongoing profits it needs to keep those payments coming. On the whole, dividend-paying companies tend to outperform the market when it’s rising, and perhaps more importantly, decline less than average in a falling market.
When it comes to ASX-listed gold stocks, dividends also have tax advantages — thanks to Australia's dividend tax credit, dividends from eligible Australian corporations have an advantage over interest income.
How to pick a dividend-paying gold stock?
So how can investors pick the right dividend-paying gold stocks? A key indicator to consider is dividend yield, which you can figure out when you take the miner’s total yearly dividend payments and divide them by its share price. This allows investors to glean how much they will get back in dividends based on each dollar they have invested.
That said, it is important to keep in mind that simply picking stocks with high dividend yields may not be entirely beneficial. This is due to the fact that a company’s dividend yield can be high because its share price has dropped, which is an obvious indicator of serious risk — not only to the dividend, but to the investment as a whole.
To get a true measure of the stability of a company’s dividend, you have to look deeper. Here are three other factors to consider before putting money into a gold dividend stock:
- A history of paying a dividend (and ideally raising it) — The more established the company’s dividend is, the less likely it is to cut or eliminate it in the near future.
- A healthy balance sheet — Look for a company with a significant cash balance and low debt.
- A reasonable payout ratio — The payout ratio is an indicator of whether a company can maintain its dividend; it is calculated by dividing the per-share dividend payment by net earnings per share. A payout ratio of 80 percent or less indicates that a mining stock has the flexibility to both maintain its dividend and make the investments it needs to boost its production or take on further exploration.
Which ASX gold stocks have the highest dividends?
Below we’ve outlined five of the top ASX-listed gold dividend stocks based on dividend yields. Data for this article was gathered using TradingView’s stock screener on September 6, 2023, and companies had market caps of over AU$50 million at the time.
1. Northern Star Resources
Dividend yield: 2.77 percent; current share price: AU$11.19
Northern Star Resources (ASX:NST) has world-class projects in both Australia and North America.
Since the acquisition of the high-grade, low-cost Paulsens gold mine in 2010, the miner has continued to build a portfolio of high-quality, high-margin mining operations with the aim of delivering maximum returns to its shareholders.
The company also owns the Jundee gold mine, which it purchased from Newmont (TSX:NGT,NYSE:NEM) in 2014 for AU$82.5 million. The project is well known due to the fact that it solely uses underground mining and not the often utilised open-pit mining. Between all of its mines, Northern Star recovered a total of 1.56 million gold ounces in the financial year ended on June 30.
Northern Star’s dividend has grown at a yearly rate of around 29 percent since 2013. In August, the company announced it will once again boost its biannual dividend payout — it will rise from the AU$0.11 in March to AU$0.155 in October.
2. Perseus Mining
Dividend yield: 1.93 percent; current share price: AU$1.81
Perseus Mining (ASX:PRU) has three operating gold mines in West Africa: Edikan in Ghana, and Sissingué and Yaouré in Côte d’Ivoire. Its acquisition of Orca Gold in 2022 gave it control of 70 percent of the Meyas Sand gold project in Sudan.
During its 2023 fiscal year, Perseus increased its annual gold production to 535,281 ounces at an all-in site cost of US$959 per ounce, and reported a revenue increase of 27 percent on the previous fiscal year. The company's robust financials prompted a bonus dividend payout for 2023 on top of its final dividend payment for the year.
Perseus Mining's next and final dividend payment for 2023 will come to AU$0.0248 per share on October 12.
3. SSR Mining
Dividend yield: 1.84 percent; current share price: AU$22.64
SSR Mining (ASX:SSR), formerly Silver Standard Resources, is a leading gold, silver, copper, lead and zinc company based out of Denver, Colorado. SSR has three operating gold mines: the Çöpler mine in Turkey; the Seabee mine in Saskatchewan, Canada; and the Marigold mine in Nevada, US. Outside of gold, the company also operates the Puna operations in Argentina, where it mines silver, lead and zinc. Between its three gold mines, in 2022 the company produced 522,000 ounces of gold.
SSR Mining pays a quarterly dividend of AU$0.07, with the most recent dividend payment made on August 11.
4. Ramelius Resources
Dividend yield: 1.52 percent; current share price: AU$1.31
Ramelius Resources (ASX:RMS) is a gold producer that has been listed on the ASX since 2003 and began production in 2006. The company’s original flagship mine, Wattle Dam, was located approximately 70 kilometres south of Kalgoorlie and was at one point the highest-grade gold mine in Australia. It was operated successfully from 2006 to 2013.
Since then, Ramelius has become more prominent in the space. Its operations are currently based at the Mount Magnet, Edna May, Marda, Tampia and Penny gold mines, all of which are located in Western Australia. In July, Ramelius fully acquired Musgrave Minerals along with its Cue gold project, which is located 35 kilometres south of Mount Magnet.
The company’s next dividend payment of AU$0.02 per share will be paid on October 12.
5. Evolution Mining
Dividend yield: 1.13 percent; current share price: AU$3.54
Evolution Mining (ASX:EVN) operates five wholly owned mines: Cowal in New South Wales; Mungari in Western Australia; Mount Rawdon and Ernest Henry in Queensland; and Red Lake in Ontario, Canada. The company’s gold production guidance for its 2024 fiscal year is 770,000 ounces at an all-in sustaining cost of US$1,370 per ounce.
Since introducing a dividend, the company has paid out 21 consecutive dividends at the half-year mark. In August 2019, Evolution updated its policy to pay a dividend whenever possible based on free cashflow generated during the financial year. The company’s next dividend payment will come to AU$0.02 per share on October 6.
This is an updated version of an article first published by the Investing News Network in 2019.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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Melissa Pistilli has been reporting on the markets and educating investors since 2006. She has covered a wide variety of industries in the investment space including mining, cannabis, tech and pharmaceuticals. She helps to educate investors about opportunities in a variety of growth markets. Melissa holds a bachelor's degree in English education as well as a master's degree in the teaching of writing, both from Humboldt State University, California.
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