If you're interested in investing in gold stocks, it's worth taking a look at the top ASX gold stocks that pay dividends.
A dividend is a sum of money that is paid regularly by a company to a class of its shareholders out of its earnings. Dividends are often issued as cash payments, but can also be issued as stock or other property.
Read on for a deeper look at gold dividend stocks and a breakdown of the top five dividend-paying ASX gold stocks.
What is a gold dividend stock?
A dividend is essentially a reward that is paid to shareholders for their investment in a company’s equity. Dividends generally comes from a company’s net profits — while the majority of a company’s net profits stay within the company as retained earnings, an outstanding portion can be divided up and distributed to shareholders.
Dividends are generally a sign that a company is flourishing, but there are times when a firm may still make dividend payments even when it's not achieving suitable profits. This tends to happen when a company wants to maintain confidence by keeping up with its established track record of regular dividend payments.
In the past, investors didn’t always look to gold stocks as a way to obtain a dividend. However, a rising number of gold miners now pay — and often raise — dividends. If investors select the right ones, they can set themselves up to profit handsomely from both a steady stream of dividend income and the strong capital gains available in resource investing.
A dividend is especially attractive in the sometimes volatile gold sector because it gives investors a degree of security — put simply, if a company pays a dividend, it generally feels that it has the cash to do so, and will have the ongoing profits it needs to keep those payments coming. On the whole, dividend-paying companies tend to outperform the market when it’s rising, and perhaps more importantly, decline less than average in a falling market.
When it comes to ASX-listed gold stocks, dividends also have tax advantages — thanks to Australia's dividend tax credit, dividends from eligible Australian corporations have an advantage over interest income.
How to pick a dividend-paying gold stock?
So how can investors pick the right dividend-paying gold stocks? A key indicator to consider is dividend yield, which you can figure out when you take the miner’s total yearly dividend payments and divide them by its share price. This allows investors to glean how much they will get back in dividends based on each dollar they have invested.
That said, it is important to keep in mind that simply picking stocks with high dividend yields may not be entirely beneficial. This is due to the fact that a company’s dividend yield can be high because its share price has dropped, which is an obvious indicator of serious risk — not only to the dividend, but to the investment as a whole.
To get a true measure of the stability of a company’s dividend, you have to look deeper. Here are three other factors to consider before putting money into a gold dividend stock:
- A history of paying a dividend (and ideally raising it) — The more established the company’s dividend is, the less likely it is to cut or eliminate it in the near future.
- A healthy balance sheet — Look for a company with a significant cash balance and low debt.
- A reasonable payout ratio — The payout ratio is an indicator of whether a company can maintain its dividend; it is calculated by dividing the per-share dividend payment by net earnings per share. A payout ratio of 80 percent or less indicates that a mining stock has the flexibility to both maintain its dividend and make the investments it needs to boost its production or take on further exploration.
Which ASX gold stocks have the highest dividends?
Below we’ve outlined five of the top ASX-listed gold dividend stocks based on dividend yields. Data for this article was gathered using TradingView’s stock screener on March 20, 2024, and companies had market caps of over AU$50 million at the time.
1. Rand Mining (ASX:RND)
Dividend yield: 7.30 percent; current share price: AU$1.37; market cap: 77.92 million
Rand Mining explores for and produces gold via mineral properties in Western Australia. Its primary focus is the East Kundana Joint Venture, which comprises two producing underground mines, Raleigh and Rubicon/Hornet /Pegasus.
Rand holds a 12.25 percent interest in the project along with Northern Star Resources’ subsidiary Gilt Edge Mining (51 percent), and Tribune Resources (36.75 percent).
Rand Mining pays an annual dividend of AU$0.10, with the most recent dividend payment made on November 30, 2023.
2. Beacon Minerals
Dividend yield: 4 percent; current share price: AU$0.024; market cap: 93.92 million
Beacon Minerals (ASX:BCN) is a gold mining and exploration company operating in the Eastern Goldfields of Western Australia, Jaurdi and MacPhersons. The Jaurdi gold project hosts the Lost Dog open pit and the Jaurdi processing plant. The MacPhersons project hosts two resources, MacPhersons Reward and Tycho, along with several small historic underground mines and exploration prospects. As part of its goal to expand the mine life at Juardi, the company recently inked a binding deal to acquire a 100 percent interest in the Mt Dimer tenements from Aurumin for AU$3 million.
Beacon’s gold production for its fiscal year 2023 came in at 29,110 ounces. Its fiscal year 2024 gold production guidance is in the range of 24,000 ounces to 27,000 ounces for the year.
The company’s last dividend payment of AU$0.001 per share was paid on December 8, 2023.
3. Northern Star Resources (ASX:NST)
Dividend yield: 2.20 percent; current share price: AU$13.40; market cap: 15.9 billion
Northern Star Resources has world-class projects in both Australia and North America.
Since the acquisition of the high-grade, low-cost Paulsens gold mine in 2010, the miner has continued to build a portfolio of high-quality, high-margin mining operations with the aim of delivering maximum returns to its shareholders.
The company also owns the Jundee gold mine, which it purchased from Newmont (TSX:NGT,NYSE:NEM) in 2014 for AU$82.5 million. The project is well known due to the fact that it solely uses underground mining and not the often utilised open-pit mining. As part of its growth strategy, Northern Star is targeting 2 million ounces of production per annum by 2026.
Northern Star’s dividend has grown at a yearly rate of around 15 percent over the past five years. The company next biannual dividend payout of AU$0.15 will be paid out on March 28, 2024.
4. Perseus Mining (ASX:PRU)
Dividend yield: 1.79 percent; current share price: AU$2.00; market cap: 2.86 billion
Perseus Mining has three operating gold mines in West Africa: Edikan in Ghana, and Sissingué and Yaouré in Côte d’Ivoire. Its acquisition of Orca Gold in 2022 gave it control of 70 percent of the Meyas Sand gold project in Sudan.
Perseus annual gold production for 2023 came to 528,486 ounces at an all-in site cost of US$984 per ounce, and reported a revenue increase of 22 percent on the previous fiscal year. The company's robust financials prompted a bonus dividend payout for 2023.
Perseus Mining's next dividend payment for 2024 will come to AU$0.0125 per share on April 5.
5. Gold Road Resources (ASX:GOR)
Dividend yield: 1.42 percent; current share price: AU$1.505; market cap: 1.68 billion
Gold Road Resources is a mid-tier Australian gold producer and explorer with projects across Western Australia, South Australia and Queensland.
The company holds a 50 percent interest in the Gruyere joint venture project in Western Australia with one of the world’s top gold producing companies, Gold Fields (NYSE:GFI). One of Australia’s top gold mines, Gruyere is a high-grade, low-cost, open-pit gold mine with a mine life of more than 10 years.
The company’s next dividend payment will come to AU$0.01 per share on April 2, 2024.
This is an updated version of an article first published by the Investing News Network in 2019.
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Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.
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