If you’re on the hunt for income in this low-yield environment, I have just the industry for you. Not only are does it offer investors high current yields, but these payouts have also been heading higher in recent years. So, if you’re prospecting for yield, it’s time for you to start digging in to the mining industry.
Last year, the top 40 miners in the world increased dividend payments by 9% for a total payout of $38 billion, according to a recent report by PwC. Overall, dividends at the top 40 mining companies are strong across the board with an average yield of around 3.7%. To help you on your journey as you dig into the mining industry for dividends, here are five top dividend payers worth a closer look as you explore for dividend gold.
Vale SA (ADR) (NYSE:VALE) Brazilian iron ore miner Vale SA (ADR) (NYSE:VALE) has already declared that it will pay out at least $4 billion in dividends to investors this year. That represents a total payment of approximately $0.78 per ADR which implies a yield of around 5.3%. Unfortunately, that’s down from the $6 billion or $1.17 per ADR Vale SA (ADR) (NYSE:VALE) paid out last year and the massive $9 billion payout or $1.72 ADR it handed over to investors in 2011. Overall though, Vale SA (ADR) (NYSE:VALE)’s payout is still well ahead of the $2.6 billion in dividends it averaged from 2007 through 2010. The key for Vale SA (ADR) (NYSE:VALE) to get that dividend back to 2011 levels is rising iron ore prices which represent 68% of its revenue in the meantime you are still paid very well to hold on to this stock.
IAMGOLD Corp (USA) (NYSE:IAG)
Canadian gold miner IAMGOLD Corp (USA) (NYSE:IAG) pays a semi-annual dividend of $0.125 per share which equates to a current yield of about 4.45%. As the company’s name would imply, its revenues are generated by its gold mining operations. Currently, the company has six gold mines across three continents as well as several potential projects in the works. The company’s current priorities given the slumping gold market include cash preservation, cost reduction and disciplined capital allocation. While the dividend looks safe for now, given the company’s stated policy of not jeopardizing is strong balance sheet, it could be reduced if gold prices fall further.