1 Great Dividend You Can Buy Right Now: Yamana Gold Inc. (USA) (AUY)

Page 1 of 2

Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn’t sustainable. In others, the dividend is so low, it’s not even worth the paper your dividend check is printed on. A solid dividend strikes the right balance of growth, value, and sustainability.

Today, and one day each week for the rest of the year, we’re going to look at one dividend-paying company that you can put in your portfolio for the long term without too much concern. This isn’t to say that these stocks don’t share the same macro risks that other companies have, but they are a step above your common grade of dividend stock. Check out last week’s selection.

Yamana Gold Inc. (USA) (NYSE:AUY)This week, I’m digging deep into the mining sector and highlighting why Yamana Gold Inc. (USA) (NYSE:AUY) is a great dividend stock you can buy right now.

Gold, why has’t thou forsaken me?
Spot gold may have a 12-year streak of increases, but you’d be hard-pressed to know that based on the chronic underperformance of gold miners. Both domestically and abroad, miners have dealt with a rash of problems ranging from increasing labor and mining equipment costs to political instability in the countries they’re operating in.

In South Africa, miner AngloGold Ashanti Limited (ADR) (NYSE:AU) came to a pay raise agreement with laborers at its TauTona and Mponeng mines in late October after a summer filled with worker sit-ins and violence in the region. Approximately 10,000 workers caused a complete shutdown in two of AngloGold’s mines, and when AngloGold’s mines came back online, other miners in the region, including Gold Fields Limited (ADR) (NYSE:GFI), were still feuding with workers.

Closer to home, it’s just been the simple issue of getting the precious metal out of the ground at a reasonable costs. Newmont Mining Corp (NYSE:NEM), one of the world’s largest miners, took a complete $1.61 billion writedown on its Hope Bay project in Canada. It’s not that Hope Bay isn’t promising; it’s simply that Newmont has multiple large projects ongoing at once and costs for all of them are rising dramatically. Likewise, Thompson Creek Metals Company Inc (USA) (NYSE:TC), which reported earnings earlier this week, is prepping to bring its Mount Milligan copper and gold mine online in the fourth quarter this year, but not after the cost of building out the mine soared considerably higher than the initial estimates, forcing the company to sell some of its gold interest to Royal Gold, Inc USA) (NASDAQ:RGLD) and to furlough some of its molybdenum mining in favor of cutting costs and receiving upfront cash from Royal Gold.

So where does this leave Yamana Gold Inc. (USA) (NYSE:AUY)? As I noted in early January, better off than any other gold miner.

Yamana’s secret weapon
In January I examined the 12 largest gold producers and determined that, based on production cash costs, production growth, debt-to-equity, and forward P/E, Yamana Gold Inc. (USA) (NYSE:AUY) possessed the best overall package of any miner. Of the miners I examined, Yamana’s cash costs were the absolutely lowest at just $201 an ounce — and there’s a good reason for this: byproduct sales. Both Yamana and Goldcorp Inc. (USA) (NYSE:GG), which operate in Central and South America, have relied heavily on byproduct sales (i.e., copper, zinc, and molybdenum) to help offset the cost of their gold production. By contrast, AngloGold, Gold Fields, and other African miners boast mining costs that are often three to four times higher on a per-ounce-basis.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!