Goldcorp is on the gold list because the company is one of the lowest- cost senior gold producers in the world, with all-in sustaining costs [AISC] in 2013 close to $1,000 an ounce and adjusted cash flow of $1.6 billion. In 2013, the company paid out $468 million in dividends, compared to $438 million in 2012, and Goldcorp pays out its dividend every month, which is very convenient for shareholders.
Goldcorp produced 2.7 million ounces of gold in 2013 and projects full-year 2014 production of 2.95 to 3.1 million ounces, increasing to 3.6 to 3.8 million ounces by 2015. Most of Goldcorp's production comes from politically-safe mining jurisdictions, with 35% of production in Canada and 33% in Mexico.
As mentioned, Goldcorp is a very low-cost producer, meaning it is profitable at current gold prices and even lower prices. For the first quarter of 2014, the company lowered AISC to $840 per ounce, below forecasts of $950 to $1,000.
I think there is a great chance that Goldcorp not only maintains but grows its current dividend. Besides producing gold at low cost, the company has a rock solid balance sheet, with $1 billion in cash and a $1.4 billion un-drawn revolving credit facility. You will see from the below chart that Goldcorp has the lowest net debt in billions as a percentage of its market cap compared to peers.
Low costs and a solid balance sheet has allowed the company to maintain a stronger dividend track record than its peers, with an estimated 32% of operating cash flow paid in dividends for 2014, compared to an estimated 16% for Yamana Gold (AUY), 11% for Agnico Eagle (AEM), and 8% for Barrick Gold (ABX).
Credit: Goldcorp corporate presentation
Because of its high quality, low cost mines, consistent dividend track record and solid balance sheet, Goldcorp is currently my favorite dividend paying gold stock.
This article was sent to 12,792 people who get email alerts on GG.
Note. one smaller gold producer with higher yield dividend payout -
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.