Thursday, August 5, 2010

Yamana Gold Boosts Dividend Too

Yamana is the latest company to jack up its dividend, with a 100% increase from four cents per share per year to eight cents. As with the Newmont and Barrick, higher earnings made it possible. Kinross, most likely because of a takeover commitment, didn't increase its own.

It looks like the gold companies are getting the message about why so much investment demand has been sucked from their shares to the gold ETFs: paper gold is a purer play, with none of the complications that come with investing in a mining company. Since the corresponding opportunities that leverage offers doesn't seem to be a big draw, a dividend (which a gold ETF cannot pay) can act as an additional inducement.

A dividend boost is also a way to advertise higher earnings.

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