Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
Yamana Gold (TSX:YRI; NYSE:AUY) has made several changes in the company’s dividend policy, among which was a further 25% increase in its dividend beginning in the first quarter of 2020.
The latest dividend hike follows the doubling of dividends announced in the third quarter, thereby representing a 125% increase in dividends since September.
In November, Yamana executive chairman Peter Marrone was quoted saying that his company was considering another dividend increase and could support an increase that is at least 50% higher.
According to the company, these initial two increases are part of a “gradual and progressive approach” to dividend increases as its cash balances continue to grow. Since declaring its first dividend in 2007, Yamana has paid more than $900 million to shareholders, leading the industry over the 12-year period.
Yamana will also begin to report dividends on a per gold equivalent ounce (GEO) of production basis, with the latest increase bringing the dividend level to $50 per GEO with room for further increases.
As part of the company’s new policy to keep dividends sustainable, Yamana said it would establish a cash reserve fund to draw upon for dividends, should the gold price decline and negatively impact on margins over a longer period of time. The company intends to maintain a balance in the fund that could support the current or any future increased dividend for a minimum period of no less than three years, independent of prevailing gold prices.
