{"id":36662,"date":"2013-03-06T20:08:02","date_gmt":"2013-03-07T01:08:02","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=36662"},"modified":"2013-03-06T20:08:02","modified_gmt":"2013-03-07T01:08:02","slug":"how-to-collect-golden-income-checks","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/03\/06\/how-to-collect-golden-income-checks\/","title":{"rendered":"How to Collect “Golden Income Checks”"},"content":{"rendered":"

By Jim Nelson – insideinvestingdaily.com<\/span><\/a><\/p>\n

For income investors, it has always been tough to find a way to invest in gold.<\/p>\n

Gold bullion doesn’t pay you any income. And gold mining stocks have never been great dividend-paying companies.<\/p>\n

Big names in the gold mining sector such Barrick Gold Corp. (NYSE:ABX<\/a>) <\/strong>and Goldcorp Inc. (NYSE:GG<\/a>)<\/strong>
\nhave averaged dividend yields of just 1% — about a quarter of what the
\ndividend-friendly utilities sector has yielded. And many others haven’t
\neven paid that much.<\/p>\n

But that’s changing. In fact, as I’ll show you today, we could be
\nentering a new era of “golden income checks” from some of the world’s
\nbiggest gold mining stocks.<\/p>\n

And that’s a BIG opportunity if you are an income investor and also long-term bullish on gold, like me.<\/strong><\/p>\n

The short-term price movement for gold and gold mining stocks has
\nbeen miserable of late. The gold price has dropped 12% over the last
\nfour months. And gold miners have been even worse hit. The Market Vectors Gold Miners ETF (NYSE:GDX<\/a>) <\/strong>is down 33% over the same time.<\/p>\n

This is a rare opportunity for income investors. That’s because gold
\nmining stocks’ prices are falling just as their dividend payments have
\nbeen rising.<\/p>\n

And one company is leading the charge toward higher dividend payouts. In April 2011 gold producer Newmont Mining Corp. (NYSE:NEM<\/a>)<\/strong> announced it would start paying its dividend based on the price of gold.<\/p>\n

Newmont has since refined this policy. Last July, it announced it
\nwould link its dividend payout to the average gold spot price for the
\npreceding quarter. This has led the company to hike its first quarter
\ndividend by 21% this year compared to the same quarter last year, based
\non an average gold price for the fourth quarter of $1,718\/oz.<\/p>\n

This makes Newmont one of the highest yielding mining companies in the world. <\/strong>The
\nstock now yields 4.4% — or almost double the S&P 500 average of
\n2.5% and well over double the puny 1.8% yield on the 10-year Treasury
\nnote.<\/p>\n

Newmont has proven and probable reserves of 99 million ounces of gold
\nin the ground. So even with gold selling for $1,000\/oz, Newmont would
\nstill be netting over $300 per ounce, plenty to continue paying its
\ndividends going forward.<\/p>\n

Of course, gold prices could continue to fall. And this would affect
\nNewmont’s dividend payments. But even if gold falls another $100 (not
\nlikely, but certainly possible) Newmont’s dividend yield would still be
\nabove 3% — triple the historical rate for gold miners.<\/p>\n

As my colleague Chris Hunter has written about<\/strong><\/a>, despite recent price falls, the fundamentals are still supportive of gold.<\/p>\n

Thirty-eight countries around the world are pursuing a zero or
\nnegative real interest rate policy. And many of the world’s major
\ndeveloped central banks — including the Fed, the European Central Bank,
\nthe Bank of Japan and the Bank of England — are pursing a policy of
\nlimitless money printing.<\/p>\n

Gold hasn’t been responding to this inflation threat of late. But
\nover time, you can expect the world’s only “honest currency” to perform
\nwell in a time of widespread currency debasement. And that means that
\nbeaten-down gold mining stocks such as Newmont should benefit.<\/p>\n

So not only is Newmont’s 4.4% dividend yield extremely attractive,
\nbut also adding some exposure to gold in your portfolio is a prudent
\nprotection against future inflationary cycles.<\/p>\n

I recommend you take advantage of the correction in prices to buy
\nshares in Newmont Mining and lock in some “golden income checks.” This
\nopportunity won’t be around forever.<\/p>\n

Sincerely,<\/p>\n

Jim Nelson – insideinvestingdaily.com<\/a><\/span><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Jim Nelson – insideinvestingdaily.com For income investors, it has always been tough to find a way to invest in gold. Gold bullion doesn’t pay you any income. And gold mining stocks have never been great dividend-paying companies. Big names in the gold mining sector such Barrick Gold Corp. (NYSE:ABX) and Goldcorp Inc. (NYSE:GG) have … <\/p>\n

Continue reading “How to Collect “Golden Income Checks””<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-36662","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/36662","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=36662"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/36662\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=36662"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=36662"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=36662"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}