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
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

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!