Hedge funds slash bullish wagers on gold over Trump election win
The precious metal has fallen about 8% from a record high on Oct. 31, with losses accelerating after Trump’s election victory last week.
The board of the world’s largest gold miner, Newmont Corporation (NYSE: NEM; TSX: NGT), has declared a fourth-quarter dividend of 55c per common share, maintaining its position as the highest dividend yield in the industry.
The dividend will be paid on March 24 to owners of record at the close of business on March 10.
The company expects to release its fourth-quarter and full-year 2021 results on February 24.
Based on cash flows through the third quarter of 2021, Newmont was on track to return $1.7 billion to shareholders through its industry-leading dividend framework.
The annualized dividend framework entails a $1.00 per share ‘sustainable’ base dividend, payable at $1,200 per ounce gold, plus a quarterly declared incremental payment targeting 40% to 60% of total attributable free cash flow above $1,200 returned to shareholders.
With the third and fourth quarter dividends now confirmed at 55c, the 2021 dividend payment to shareholders is $2.20 per share on an annualized basis.
Newmont says it evaluates the dividend returns in concert with gold price fluctuations of $300 per ounce. Should gold trade at $2,100 per ounce, annualized payouts could reach $2.80 to $3.70 per share.
Adding further value for shareholders is the company’s opportunistic $1 billion share repurchase program, which had seen Newmont repurchase more than $400 million up to the end of September.
Newmont is well-positioned for leverage in a rising gold price, with free cash flows increasing $400 million for every $100 per ounce increase in the gold price.
The gold price has been ticking higher in recent days amid increased global geopolitical tension, moving above $1,900 per ounce on Tuesday.
At $67.33, Newmont’s New York-quoted equity is trading up nearly 19% over the 12-month timeframe, giving it a market capitalization of $53.7 billion.
